A Study on the Foreign Transactions of China’s Cotton Textile Industry Before the Reform and Open Door Era

This paper aims to confirm how China's representative industry, the cotton textile industry, was influenced by external transactions before the reform and open door era, and what role it played in the Chinese economy. In the China’s cotton textile industry, raw cotton showed a significant level of self-sufficiency through domestic cotton cultivation. This result was because the Chinese government effectively implemented a cotton production increase policy through the planned economic system. In addition, few imports were made because cotton products were produced enough to meet domestic demand. Rather, by exporting cotton products that exceed domestic demand, food and facilities could be imported as export price. As a result, the China’s cotton textile industry has become a leading export industry. It contributed to economic growth by acquiring foreign currency through the export of cotton products and helping to solve the problem of foreign currency shortage in the early stages of economic development. Compared to the case of Korea, Korea and China showed different patterns in the external trade of raw cotton and cotton products, but their roles in the economy were similar. In conclusion, the China’s cotton textile industry increased production by importing raw cotton, which was insufficient through external transactions, and it can be said that it contributed to the development of the cotton textile industry and the development of the Chinese economy by exporting cotton products.