Innovating macro-control of cotton industry to solve market operation problems


Release time:

2018-01-16

The report of the 19th National Congress of the Communist Party of China proposed that we should adhere to the direction of socialist market economic reform, let the market mechanism play a decisive role in the allocation of resources, give better play to the role of the government, optimize industrial policies, and improve the way of macro-control. The national cotton reserve policy innovates the macro-control model of the cotton industry, allows the market to play a decisive role in the allocation of cotton resources, and realizes the institutionalized operation of macro-control. It is an active exploration and successful practice to better play the role of the government. The national cotton storage rotation policy is under the unified leadership of the National Development and Reform Commission and the Ministry of Finance, according to the rotation target, through market research, joint meeting decision-making system and different scope of conference platforms and other policies.

The report of the 19th National Congress of the Communist Party of China proposed that we should adhere to the direction of socialist market economic reform, let the market mechanism play a decisive role in the allocation of resources, give better play to the role of the government, optimize industrial policies, and improve the way of macro-control. The national cotton reserve policy innovates the macro-control model of the cotton industry, allows the market to play a decisive role in the allocation of cotton resources, and realizes the institutionalized operation of macro-control. It is an active exploration and successful practice to better play the role of the government.
 
The national cotton storage rotation policy is under the unified leadership of the National Development and Reform Commission and the Ministry of Finance, according to the rotation target, through market research, joint meeting decision-making system and different scope of meeting platforms and other policy tools, acting on intermediary objectives, reasonable guidance, scientific management of market expectations, regulation and guidance of cotton market activities, to achieve the rotation policy objectives. Since the 2015 cotton year, the national cotton storage round storage policy has been implemented in an orderly manner, the stock of cotton reserves has been rapidly digested, the cotton market has been running smoothly, and the benefits of cotton textile have increased significantly.
 
First, a macro-control plan and policy mechanism for the cotton industry have been established. In the process of planning and formulating the national cotton storage rotation policy, the policy-making department, on the basis of comprehensive investigation and research, aimed at the sensitive and efficient characteristics of macro policy control, followed the principles of foresight, scientificity, continuity and guidance, and reasonably grasped the balance between cotton supply and demand and the internal logic between industrial and commercial inventory and market changes, coordinate relevant executive bodies to scientifically formulate policy principles, round out quantity, round out time and round out price. In the process of implementing the rotation policy, we will closely follow and supervise the operation trend of the industrial chain, and evaluate the effectiveness of the policy in a timely manner. According to the market operation and supply and demand trends, the policy implementation of the main body of the China Fiber Bureau and China Cotton Reserve continue to optimize the national cotton storage quality inspection force and the national cotton storage warehouse resource allocation, to ensure that the rotation policy will be fully implemented in place. Policy departments coordinate and adjust policies in a timely manner against rotation targets. The rotation policy constitutes a policy mechanism operation system for policy planning, formulation, release, implementation, effect evaluation, full supervision and continuous optimization. The macro-control policy planning and policy mechanism of the cotton industry constitute the core and main body of the macro-control mechanism.
 
Second, an effective macro-control mechanism is constructed with the information platform as the carrier. The market mechanism is mainly composed of price mechanism, supply and demand mechanism, competition mechanism and risk mechanism, which regulates production and circulation through market price information to realize the allocation of resources by the market. In the process of market competition, the level of commodity supply and demand and the effective dissemination of information constitute an influential market expectation, on the basis of which both supply and demand play games, forming the mainstream price of the commodity market. However, unexpected events that exceed market expectations often lead to large fluctuations in market prices, which is not conducive to the smooth operation of the market. From the brewing of the cotton reserve rotation policy to the official release of the announcement, the policy-making department, on the basis of the joint meeting of the rotation policy, through different forms of meeting platforms and decision-making mechanisms, forms a rapid and effective information exchange channel between policy-making and market entities. In view of the policy focus and difficulties, through the information platform, enhance communication and interaction, reach a basic consensus between policy-making departments and industries and market subjects, reasonably guide and scientifically manage market expectations, and reduce the asymmetry between policy and market. Through the government can control policy measures and related mechanisms indirectly affect the cotton market main body's judgment and expectation of the market, the market main body thus forms the management decision, maintains the stability of the overall market level of cotton, and reduces the economic cycle fluctuation while promoting the economic growth of cotton industry. The information platform constitutes the "link" of the macro-prudential management mechanism system of the cotton industry and becomes the carrier of the macro-adjustment mechanism. The national cotton storage policy scientifically grasps the internal linkage law of macro-control, information platform and commodity market operation, innovates the macro-governance mode of cotton industry, makes the macro-control operation of cotton into a standardized, orderly and transparent track, and constructs an effective macro-control mechanism.
 
Third, the innovation to set a round of reserve prices, so that the market in the national reserve cotton configuration play a decisive role. In the context of the global economic downturn and increasing downward pressure on the domestic economy, the continuous and large-scale release of national cotton reserves to the market is bound to have an impact on the already fragile cotton market, thereby endangering the healthy development of the cotton and textile industry, and the rotation policy is facing a dilemma. How to realize the effective release of national cotton storage?
 
Scientifically determining the daily rotation volume and reasonably setting the rotation reserve price is the core link to solve the problem. The policy department innovates the pricing mechanism of the reserve price of the national cotton reserve wheel, makes the market play a decisive role in the allocation of the national cotton reserve, and maintains the international competitive strength of the domestic cotton textile enterprises. It adopts the method of "determining according to the market dynamics. In principle, the reserve price of listed sales is linked with the spot price of cotton at home and abroad. The spot price index of cotton in the domestic market and the spot price of cotton in the international market are calculated by 50% and adjusted once every week", in order to ensure that the round out of the reserve price with the market at the same time, the internal and external cotton price difference to form an effective constraint.
 
The policy of wheel storage injected competitive strength into the cotton textile industry, the locomotive of the cotton industry, and then activated the cotton industry chain, which received a positive response from the market and the industry.
 
Fourth, camera regulation to enhance the flexibility and precision of the round storage policy. Rapidly changing is an inherent characteristic of the market. Cotton has long become a commodity futures trading variety at home and abroad. In addition to the supply and demand relationship in the cotton market, there are also a large number of financial-related factors. The operation of the cotton market is full of complexity and uncertainty.
 
While the policy clearly formulates the relevant principles, it leaves appropriate space and layout for the pre-adjustment and fine-tuning of the policy in the later period without losing flexibility. In response to the new changes in the market, the rotation policy to maximize the timely provision of new response tools, to achieve camera regulation. Policy departments closely follow the market situation, remain alert to emerging problems, be prepared for various potential risks, respond to market concerns in a timely manner, stabilize market expectations, and enhance market consensus. Between the state reserve cotton launch and the market, the optimization of quality structure and the precise double matching of scale and quantity have been realized, ensuring the controllable and efficient policy.