Report on A.C.A’s Participation in the Annual Forum of

China Cotton Association

Cotonou, June, 2014

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CONTENTS

INTRODUCTION

I-OPENING CEREMONY

II-PARTICIPATION IN THE MEETING OF THE COMMITTEE FORINTERNATIONAL CO-OPERATION BETWEEN COTTONASSOCIATIONS ( CICCA)

III-PAPER PRESENTED BY A.C.A

IV- Meeting with CCA’s Leaders

ANNEXE1/Synthetic Report of the FORUM

ANNEXE N°2 Welcome Speech

ANNEXE N°3 : Keynote speech

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INTRODUCTION

Invited by China Cotton Association (CCA), a delegation of A.C.A took part in theCCA’s Annual Forum which took place in XIAMENE, from 15 to 16 May, 2014.The key theme of the Forum was entitled: “TIME IS CHANGING, AND SO DOESTHE COTTON INDUSTRY”. This theme underlines the importance of reforms andinnovations with regard to the cotton industry, considering the emerging situation andnew policy framework in China.

A.C.A was represented by Mr. MAHIELDIN ALI MOHAMED ABDALLA, A.C.AChairman, and Mr. Adeyemi Achamou FAHALA, A.C.A Permanent Secretary.

A.C.A’s participation was materialised by the following key activities, namely:

1. Attendance at the Opening Ceremony of the Forum;

2. Involvement in CICCA’s Meeting;

3. Presentation of a Paper on A.C.A and African Cotton;

4. Meeting with the Vice Secretary-General of China Cotton Association:Discussions on A.C.A-AProCA-CCA Strategic Partnership.

I- OPENING CEREMONY

About thirty minutes prior to the opening ceremony, A.C.A Delegation was usheredinto the VIP Hall where top personnalities invited to the Forum were waiting. There,the A.C.A Chairman was introduced to the highly distinguished guests.

Placed under the autority of the Chairman of China Cotton Association, the openingceremony was highlighted by four (4) addresses.

In his opening speech entitled: “Promoting the Sustainable Development of ChinaCotton Industry Through a Vigourous Reform and Innovation”, the CCA’s Chairmanwelcomed all the guests who came from the four corners of the world, includingAfrica, as represented by the African Cotton Association (A.C.A).

He then went on to narrate the situation now prevailing in China’s cotton sub-sector.Please refer to the full text of the said speech as attached to this report.

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II- PARTICIPATION IN THE MEETING OFTHE COMMITTEE FOR INTERNATIONAL CO-OPERATION BETWEEN COTTON ASSOCIATIONS( CICCA)

The meeting was convened to consider three (3) issues that remained pending as fromthe last meeting of the Committee that took place alongside the Bremen Conference inGermany, namely:

1- Opening CICCA’s membership up to any other organisations that appliesfor it, provided that it runs activities in the cotton sector. Should they beadmitted as observers or as full-right members?

2- It was also proposed to replace the term « Default List », which is used torefer to companies which are not up to date with regard to rules andregulations, with « List of Unfulfilled Awards » ;

3- Considering the declining performance of the existing CICCA’s web site,with no regular updating for some years now, it was proposed to set up anew web site that would be in consonance with the modern standard.Besides, it was suggested that the cost of the new web site be made quiteaffordable. Following comparison of the cost of similar webs sites, theproposed new site was estimated at £2 to £3 000 (approximately FCFA3 000 000) . Consequentlky, it was resolved to seek the opinion of allmembers before proceeding on with the project.

Follwoing debates, regarding the first issue, it was resolved that reflectionsshould continue towards reaching a final decision during the next CICCA’smeeting in DUBAI, alongside ICAC’s meeting.

As for the other two issues, they were validated by participants, while theexecutive body was given the green light to implement the relevant decisions.

Sundries:

At this stage, A.C.A

1. Pointed to the fact that, since 2012, it has not been receiving CICCA’sbills covering annual membership dues, although the matter was rasiedup during the HONG KONG meting in 2012. Mails were regularlydispatched to CICCA to request for the said bills.

2. Invited CICCA’s members to show interest in A.C.A and participate inthe Annual Congress of the Pan-African Association holding in March

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every year, while scheduling CICCA’s meeting for such an occasion asit is done in the case of other international confabs.

Participants in the meeting took note of these remarks, while CICCA’sSecretariat promised to ensure the regualr conveyance of membership-due bills.Moreover, to facilitate the participation of CICCA’s members in A.C.A’sAnnual Congresses, it was suggested that A.C.A should ensure that theCongresses are scheduled while taking into consideration the timing of BremenConference (in Germany), which also takes place in March, but bi-annually.

III- PAPER PRESENTED BY A.C.A

At the Forum, several Papers were delivered, including A.C.A’s entitled:African Cotton Association (A.C.A): Presentation, Activities and AfricanCotton Quality.

Through this Paper, the history and organisational set-up of A.C.A werehighlighted. While referring to the Association’s membership, the variouscategories thereof were outlined in a way as to make it clear that cotton actorsworldwide are free to join A.C.A as correspondent members.

Regarding A.C.A’s activities, the 2011-2016 Strategic Plan, currently beingimplemented, was also highlighted, as well as the existence of five (5)Technical Commissions which constitute the operational arms of theAssociation within Active Member Cotton Companies. Activities alreadyaccomplished by the Technical Commissions were underlined, with particularreference to the development of joint and integrating projects and achievementsbeing realised since 2010 by the Classification/Metrology TechnicalCommission in order to the quality of African cotton. Prominent amongstother accomplished or ongoing

actions that were outlined in the Paper are: Regular Updating of AfricanCotton Standards, Alignment of Country-Based Sales Types with theseStandards, the Development and Application of the African Cotton QualityCharter aiming at reducing cotton contamination to the minimum possible andputting African cotton among the best in the world.

Following the presentation, it was noted that many participants showed interestin African cotton. Thus, members of the African delegation were approachedby many and various Indian, Bangladesh and Chinese participants, either toseek for more informations, joint the Association, exchange contacts towardspurchasing African cotton, or to enquire about modalities for investing in theAfrican cotton sub-sector. It was mutually agreed to follow up these contacts

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through mail exchanges in order to establish links that would make it possiblefor different parties to obtain satisfactory answers to relevant issues.

IV- Meeting with CCA’s Leaders

The purpose was to renew the initiative concerning the A.C.A-AProCA-CCAPartnership, the basis of which was laid in 2011, on the occasion of ICAC’s70th Plenary Meeting in BUENOS AIR, Argentina.

Actually, while taking part in the above-mentioned meeting, the Chairmen ofA.C.A, Mr. Ahmed Bachir DIOP, AProCA, Mr. Moussa SABALY andLeaders of CCA discussed about the need to establish a partnership in order toprotect and promote African and Chinese cotton actors.

That initiative led to the drafting of a Memorndum of Understanding, a copy ofwhich was forwarded to CCA for possible amenment. Seizing the opportunityof the Forum, A.C.A sought for discussions on the proposed partnership. As aresult, CCA’s leaders agreed to continue looking into the initiative towardsestablishing a fruitful co-operation between the three organisations.

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ANNEXE1/Synthetic Report of the FORUM

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The 2014 China Cotton Industry Development Summit Forum was held successfully

in Xiamen, Fujian province on 15-16 May, which was organized by China Cotton

Association (CCA), and joined by more than 700 participants of cotton experts,

government officials, and cotton & textile industry community members from nearly

20 countries in the world. As the 6th China Cotton Summit, this biannual event builds

up more global impact and provides platform for dialogues on current cotton issues,

and the theme of this year is NEW ERA, NEW COTTON INDUSTRY, emphasizing

on cotton industry reform and innovation under the new situation and policy

environment.

Speeches and discussions under the topic of China’s new round of rural reform and

cotton industry policy, situation analysis and outlook for China and global cotton &

textile market, were given by government officials from department of rural economy

of National Development and Reform Commission (NDRC), department of economic

trade of NDRC, Agriculture Development Bank of China, leaders from China Cotton

Association, China National Textile and Apparel Council, National Cotton Council,

African Cotton Association and other cotton related organizations and companies.

Experts and delegates domestic and abroad also joined the round table session to

exchange new thoughts and strategies for cotton industry chain under the target price

policy of China.

During the summit, CCA had meetings with International Cotton Association,

National Cotton Council and Africa Cotton Association to exchange opinions on

cotton trade issues and further cooperation. The consultative group meeting of

Committee for International Co-operation between Cotton Associations (CICCA) was

held during this event, and joined by 7 member associations including CCA.

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The keynote speech was given by Zhou Shengtao, president of China Cotton

Association, and welcome speeches were made by Luo Lin, member of CCP, Council

Deputy Director, All China Federation of Supply and Marketing Cooperatives, and

Chen Rongkai, Vice Governor, People’s Government of Fujian Province.

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ANNEXE N°2: Welcome Speech

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Speech on 2014 China Cotton Industry DevelopmentSummit Forum

Luo Lin, Council Deputy Director of

All China Federation of Supply and Marketing Cooperatives

(15, May, 2014)

Distinguished guests, ladies and gentlemen,

Today, 2014 China Cotton Industry Development Summit Forum opens in Xiamen,Fujian province. I would like to extend the sincere congratulations to the opening ofthe Forum on behalf of All China Federation of Supply and Marketing Cooperatives. Iwould also send my warmest welcome to participants from china and abroad; and givethe great gratitude to the support provided by the Government of Fujian Province,Government of Xiamen City, and Xiamen Supply and Marketing Cooperatives!

Since the Year of 2004, China Cotton Industry Development Summit Forum has beenheld every two years, becoming a communication and exchange platform with globalinfluence, and attracting cotton experts and community members from the world. Thetheme of this 2014 Summit ‘’New Era, New Cotton Industry’’ has practicalsignificance. In the context of globalization, China enters its new era of deepeningreform and opening-up period, with deeper reform practices in the key areas,especially the agriculture field. When looking forward to both China and the globaleconomy future development, we believe they will experience large adjustment ineconomy structures. Chinese economy comes to its transforming era of qualityimprovement and upgrading. This is very background under which we extend thedialogue of future cotton industry development. I urge everybody to speak your mindand contribute your knowledge and expertise to the new chapter and development ofChina and global cotton industry.

Since the year 2011, Chinese government implemented the cotton temporary reservepolicy, which helped to stabilize the domestic cotton production and protect cottongrowers’ interest. However, as the cotton price in international market moveddownward during the recent two years, the domestic cotton market is losing itsdynamics, and is in want of policy reform. In this year, the central governmentdecided to stop the reserve policy which has been normalized and institutionalized ,replace it with launching the cotton target price subsidy in Xinjiang cotton pilot areas,therefore , to unleash the market decisive power in market resource allocation, guidingthe cotton production, logistic and consumption, improving the competitiveness ofcotton textile production and promoting the sustainable development of the overall

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cotton industry chain, under the premise of protecting cotton growers’ interest. Thetarget price trial will bring relative large impact on different aspects of industry chain,which is supposed to be opportunity as well as challenge. Cotton growers or tradecompanies you may be, shall shift from the stereotype way of thinking to emphasis onnew polices, and most importantly, to keep a close eye on the supply and demandsituations domestic and abroad, in order to have the smooth transfer and maintaingood production or business.

All China Federation of Supply and Marketing Cooperatives (ACFSMC) is anorganization aiming at agriculture service, and plays the key role in socializedagriculture service, modern agriculture logistics and farmers cooperatives. Cotton isthe advantaged field in ACFSMC tradition, no matter during the planned economytime or the open market economy, ACFSMC system stays to be a significant power,and takes more than 50% of cotton market share even today. Facing the cotton policychanging time, ACFSMC will support national macro economy regulation byconducting study and survey in the cotton target price subsidy trial areas, encouragingvaried market players into the market, playing the leading role and providingcomprehensive platform for the reform.

This conference is held at the very time of policy transforming, attended by cottondelegates from the globe. I hope this summit will make progress on the followingaspects in a fruitful way.

1. Seize the chance to reform boldly

The inevitable road for the Chinese cotton industry sustainable development lies incost reducing and scale operation, therefore, we need to seize this great opportunity ofgovernment agriculture subsidy policy change, new agriculture management systembuilding, rural land system reform, and act boldly in improving the low productivityof agriculture production and management in both ideas and modes. On reform ofmoderate scale agriculture production, cooperatives in some cotton productionprovinces explored new managing mode of Scaled Farm Land Agent Management,which allows the machine usage in the whole production process, and improves thecommon interests of cotton growers and agents by scale production. Presently,National Cotton Logistic Planning is being drafted by government departmentsrelated, and some large scale enterprise of ACFSMC are investing in the cottonlogistics network, and building the cotton logistic zones, which I believe will promotecotton production and improve logistic efficiency.

2. Speed up transformation by innovation

Now, cotton industry faces the new market environment, which asks for the new wayof thinking on development. For example, efforts could be taken to reach the upstream

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of cotton production for the resource and downstream of textiles to increase the addedvalue of products; use the modern technology fully to broaden the sales channels;‘’walk out’’ to integrate the resources in the global scale. Only through innovation,could we shift and transform smoothly to the future development.

3. Strengthen cooperation to build consensus

With the largest cotton import and textile export in the world, China cotton and textileindustries could not move forward without the support of the rest of the world, neitherthe world could leave the market and work factory of China. Now, the Chinesegovernment is actively promoting the further reform and open-up practice on a highlevel, this is golden opportunity for us to discuss new cooperation in trade, projectconstructions and investments, for the common interest and win-win result.

The innovation of cotton industry reform has no ending period. The mission on ourshoulder still has a long way to be accomplished. Let us seize the chance to contributein our own way to write down the new chapter of Chinese cotton industrydevelopment!

To close my speech, I would like to express my best wishes to you all and the summit.

Wish you a great time here and a full success to the summit!

Thank you all!

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ANNEXE N°3 : Keynote speech

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Promote the Sustainable Development of China CottonIndustry through Vigorous Reform and Innovation

Keynote speech of 2014 China Cotton Industry Development Summit Forum(15, May, 2014)

Zhou ShengtaoDistinguished guests, ladies and gentlemen,Good Morning!

Today, we are brought together here in this beautiful coastal city of Xiamen to lookforward to the future of the Chinese and global cotton industry. On behalf of theorganizing committee, I would like to extend my warm welcome to all guests anddelegates present at 2014 China Cotton Industry Development Summit Forum, andexpress my sincere gratitude to Fujian Provincial Government, Fujian Supply andMarketing Cooperative, Xiamen Municipal Government, and Xiamen Supply andMarketing Cooperative for your great support to this forum.

The textile industry is a traditional industry in Fujian Province. Since the 1990s, theprovince has taken advantage of its coastal position and China‘s economic openingpolicy to vigorously develop its textile industry. As a result, textile and apparelcompanies owned by various investors sprung up and made rapid strides. Thanks tothem, the Fujian textile industry has constituted an important part of the Chinesetextile sector as a whole. Xiamen is not only a modern international port city but alsoone of the earliest special economic zones that had implemented the reform andopening up policy in China. It is home to more than 20 ethnic minorities and a largenumber of returned overseas Chinese and compatriots from Hong Kong, Macao andTaiwan. With diverse cultures originating, interacting and blending here, Xiamenbecomes a place featuring an open, inclusive and cooperative atmosphere. In recentyears, the city’s newly acquired reputation in innovation and entrepreneurshipbreathes new life into the renowned livable city. In the increasingly connected world, Iam convinced that the characteristics of this city ‘’reform’’, ‘’innovation’’ and‘’cooperation’’ are also three essential elements for the sustainable growth of theChinese and even global cotton industry.

The theme of this forum is ‘’New Era, New Cotton Industry’. Around the theme of thesummit, attendees will hold discussions about how the cotton industry can achieve thesustainable development through reform and innovation in line with the requirementsof new circumstances and policies.

Reform turns to be the greatest bonus. The introduction of the household-responsibility system after the 3rd Plenary Session of the 11th Central Committee ofthe Communist Party of China convened in 1978 boosted the productivity of the

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cotton industry substantially. Over the past 35 years, China saw its total cotton outputand per-unit yield more than doubling, making the country the world’s largest cottonproducer. Such an abundance of cotton supply lays a foundation for the rapiddevelopment of its textile industry, making it possible for China to manufacture textilefibers that reach half of the world’s total output. In addition, the reform of the cottondistribution system launched in 1998 has helped to ease the control over cotton prices,procurement and sales, hence invigorating the market. Today, we reach a historicalwatershed in the development of the cotton industry in which we need to rely onreforms again to solve the challenges confronting the industry. The reforms areexpected to facilitate changes in cotton production and marketing and thus achievehigher efficiency at lower cost; and they would also be designed to straighten out therelations between the government and market, allowing for the decisive role of themarket while at the same time enabling the government to better perform its duties inmacro-economic control.

To protect the interests of cotton growers and stabilize the cotton market, the Chinesegovernment adopts the temporary cotton reserve policy. In 2013, the state reservepurchased 6, 31 million tons of cotton, of which 64% came from Xinjiang.Implemented for three consecutive years since 2011, the state reserve has broughtnearly 16 million tons of cotton, about 80% of China’s total cotton output over thesame period. In 2011 when cotton prices fluctuated furiously, China CottonAssociation (CCA) showed its support for the introduction of the temporary cottonreserve policy with a view to stabilizing the market and maintaining the comparativeadvantage of cotton growing. Since its introduction, the policy has played animportant role in protecting cotton growers ‘interests and maintaining market stabilityas the data below would show.

Between 2011 and 2013, the average procurement price for seed cotton nationwidewas RMB 8.44 per kilogram, an increase of nearly 20% over 2008-2010. The price ofstandard-grade lint cotton in china from 2011 to 2013 remained broadly stable at alevel above RMB 19,000 per ton, fluctuating at a range no more than 10% while theprice change range on the global market was nearly 30%over the same period. Thereserve policy reached its overall goal in that it increased income of cotton growers,and at the same time kept cotton output and prices stable over the three years.

However, the reserve policy over the years also caused a series of problems such asmarket price signal failure, the loss of market dynamic, widening cotton price gap athome and abroad, and caused central financial burden. Therefore, it is urgent for us toreform and improve the current reserve policies so as to promote the sustainabledevelopment of the cotton industry. In 2014, despite the general positive trend, theglobal economy still suffers from many uncertainties. The profound impact of the

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global financial crisis can still be felt, major developed economies haven’t solved theirstructural problems yet and emerging economies have to withstand increased risk andpressure from foreign countries. China also faces complicated economic environmentas the growth-supporting factors are undergoing profound changes and the underlyingconflicts become prominent. The Chinese economy, in the throes of economicrestructuring and slowing economic growth, has reached a critical moment. Thepressure of economic downturn is still great with continuing uncertainty for its futuredevelopment as caused by inadequate international demands, increasing labor cost,and other unfavorable factors; therefore, it takes time for the Chinese textile industryto find a way out.

Notwithstanding all these problems, we should be aware that Chinese economy standson a sound ground overall and is endowed with important strategic opportunities.

Given the ongoing process of industrialization, urbanization and considerable roomfor regional development, China has the capabilities and conditions to maintain a mid-to high-speed economic growth in the coming period. A slowing economic growth isconducive to balancing quality and efficiency, and creating favorable condition foreconomy restructuring. With a population of 1, 3 billion, China has enormousdomestic demands. Clothing, as one of basic necessities, should be attached with highimportance.

As the reform develops, pent-up consumer demands will be further tapped, which inturn stimulates sufficient supplies. In the ten years from 2004 to 2013, China ‘s annualaverage cotton planting areas and cotton output underwent stable growth, accountingfor around 30% of the world’s total. The average cotton productivity across thecountry continuously increased, reaching 100 kilograms per mu (about 667m2 ) in2013.

Xinjiang, with 134 kilograms, is among the highest cotton production level in theworld. Moreover, the introduction of modern production and operation practices willfurther boost the cotton productivity. The textile industry, as one of China’s traditionaland competitive industries, features a full industrial chain, sound auxiliary facilities,high skilled workers, and great flexibility in transformation. Despite the impact of thefinancial crisis, the industry has managed to maintain a stable growth in import andexport. At the very beginning of the reform and opening up, the textile and garmentexports took a 20% share in China’s gross exports. As the export mix changes, thepercentage remains as high as 13%, textiles and garments remain one of the majorChinese export commodities. In 2013, 32 million tons of yarn was produced in Chinaand USD 284 billion of textiles and garments were exported, increasing by 7.2% and11. 4% on a year-on year basis respectively and both accounting for about one –thirdof the world’s total. In recent years, the industry quickened its pace in transformation

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and upgrading, resulting in continuously improved productivity and constantlyemerging new products. Increasing domestic demands, further opening to the worldand innovations in technology, marketing and other fields are becoming new enginesdriving the growth of the industry .Thus in a long period to come, China will still needto import a certain amount of cotton to fill its demand gap, and its position as theworld’s largest cotton producer and consumer will remain unchanged.

The 3rd Plenary Session of the 18th CPC Central Committee convened last year notonly marked that China launched a new round of rural reform but also pointedanother new direction for the Chinese cotton industry-- scale operation in variousforms. In 2014 the Chinese government launched a pilot program of Xinjiang cottontarget price reform and closed the temporary cotton reserve purchase. Through suchlong-run endeavors, it will leave cotton prices forming to the market, seek for ways todecouple government subsidies with the cotton pricing mechanism, improve themarket regulation system and on this basis, allow the market to play its decisive rolewhile ensuring cotton growers’ basic interests. In 2007, CCA sent a report ofEstablishing a long –term Mechanism for the development of the cotton industry tothe State Council .In the report , it raised a series of suggestions include formulatingfavorable cotton growing policies, such as granting direct subsidy to cotton growers,supporting cotton cooperatives, introducing cotton production insurances, andbuilding Xinjiang into a national high-quality cotton base in line with the relevantgrain policies; and also policies like improving macro- economic regulation in cottonindustry and relaxing restriction on import cotton quotas. In the early 2013, CCAcame up with the suggestion of giving cotton grower subsidies directly once again.

‘’ Reform can never be smooth sailing’’. With the target price reform launched thisyear, the market differs from what it was under the reserve policy as risks anduncertainties increase. In terms of supply and demand, by the latest estimates of CCA, in 2014 China will see its cotton planting acreage go down by 12,6% from lastYear. But thanks to the sufficient beginning stocks, cotton supplies will exceed thedemands. Therefore, we should seize the opportunities along with the reform in bothcotton production and distribution and be clearly aware of the market trend so as toshift operation modes, conduct industrial transfer, and respond to challenges withinnovations as soon as possible. Nowadays, China lags behind the developedcountries on cotton productivity. Caused by small scale farming agriculture economy ,this cannot be changed by a single policy or within a short period .To achieve thesustained and healthy development of the Chinese cotton industry, we should replacethe current scattered operation model with the large-scale, machine –based andintensive operation with the characteristics of modern agriculture. It will be a longway to go. In recent years, China saw rapid increase in farmers’ cooperatives andlarge cotton growers who managed to improve the efficiency of land and labor use

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through moderate scale operation. For instance, Shandong Supply and MarketingCooperative organized farmer households to set up the cotton cooperative. Allmembers entrust their farmlands to the cooperative to form large scale land somachine would be used from cotton seeding to picking. With machine usagepercentage of 95%, the production cost for each mu of land reduced by about RMB450 while the cotton output per mu increased by nearly 20%. The farm work that usedto need 90 farmers now can be done by only five to six persons with help of machines.The Chinese government has attached high importance to the development of farmers‘cooperatives. It has issued a series of favorable policies. Especially, the No.1document of the central government released in 2014 includes two permissions whichhelp to channel the government funding to the farmers’ cooperatives. According to thedocument, the government allows direct government funding for the qualifiedcooperatives and also permits them to hold and manage the assets from the financialsubsidies. With the support of the governments and cooperation of farmers, the scaleoperation represented by the cooperatives boasts many advantages which can make upthe defects of the small scale farming economy, leading a new direction for the futuregrowth of the cotton industry.

Meanwhile, the Chinese textile industry should seize the opportunities brought by thereform to expand presence in the emerging markets at home and abroad, respect theguiding role of the market in the development of technology and products as well asthe restructuring of regional economies, promote independent innovations at anaccelerated speed, make strides in energy conservation and emission reduction,address the excess capacity and allocate resources in an efficient manner, with a viewto finding out a way suitable for its own development.

Currently, the comprehensive reform in China is being carried out in all fields.Agriculture, As an industry vital to national interest and people’s well-being, drawsenormous attention. The No.1 document of the central government this year puts itsfocus on agriculture again and comes up with a series of favorable policies such asimproving the price mechanism for agricultural products and launching pilotprograms of the target price subsidies; improving the system to regulate and controlthe market of agricultural products; promoting the innovation of agriculturaltechnology and the application of agricultural machines; building a market system ofagricultural products; supporting the development of new types of agriculturaloperation entities; improving a system of social services for the agriculturaldevelopment; intensifying efforts to support and protect the agriculture; andestablishing a long- term mechanism to promote the sustainable development of theagriculture. Launched under such circumstances, the Xinjiang cotton target pricereform is aimed to promote the long-term development of the Chinese cotton industry.We believe that it will play an important role in optimizing the cotton planting

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pattern and invigorating the cotton market .In terms of regulation and control,theChinese government, based on the market rules, will fulfill its responsibilities tolaunch the pilot programs of the reform, formulate supporting measures, and replaceold polices with new ones in a smooth manner.

In a globalized world, countries are more closely connected and interacted. I believe,the reform and development which the Chinese cotton industry is undergoing willexert more positive influences on the global cotton sector. Over the years, CCA hasbeen engaged in enhancing the communication and exchange with cotton producingcountries, consuming countries, and cotton organizations so as to expand cooperation.

Last year, we modified and published CCA Cotton Import Contract &General Termsin the hope of better regulating the international cotton trade. Taking the presidency ofthe Committee for International Co- operation between Cotton Associations (CICCA), CCA will honor its responsibilities so as to establish an informationexchange system covering member cotton associations of different countries, help tocoordinate and solve trade disputes, and maintain the order of international cottontrade .In addition , during the forum an international cotton trade seminar will beheld through which, we hope you can gain more understanding and build friendship.

Ladies and Gentlemen.

In response to the financial crisis, many countries began to concentrate on economicrestructuring. In this sense, the crisis can also be seen as an opportunity whichawakens us to underlying problems, the urgency of reform, the need for innovations aswell as the value of cooperation.

In March this year, Chinese Premier Li Keqiang raised three points to describe theglobal economy. Firstly, the overall situation undergoes new changes but still remainscomplicated. Developed countries should pay more attention to the influence theirpolicies exert on other countries. Secondly, emerging markets face difficulties andchallenges but they are still important powerhouses for the global economic growth.

Thirdly, even though it is difficult to coordinate the macro-economic control policiesof different countries, we should work together for our common development. It isalso true for the cotton industry. No matter the developed or the developing countries,cotton producing or consuming countries, all should boldly reform, innovate andenhance cooperation and consensus through dialogues and consultation. We areconfident that through our joint efforts the cotton industry will have a brighter future.

In closing, I wish the forum a great success.

Thank you!