The looked-for cotton supply from North China is not materializing. The 1936-37 production of 1,288,000 bales of 500 Ibs. each fell to a 1937-38 figure of 1,094,000 bales and the estimate is 873,000 bales for the 1938-30 season. This last figure is not enough to meet the needs of Tientsin, Shanghai and Manchoukuo spinners.
The chief target of criticism is the cotton "link" system, which connects imports to exports, inaugurated by the Government in July of last year io relieve the raw cotton scarcity. Traders complain that the proviso by ich they must sell finished goods thin three months (grey textiles within two months) after importing the raw material means in practice that they are forced to resort to "dumping" as the end of the period approaches.
But spinners place more hope in pleas for the easing of exports from Japan to yen-bloc countries, which are sure markets for their goods (partly because of the wartime destruction or dismantling of Chinese mills), The Finance Ministry, however, has repeatedly pointed out that such exports do nothing to aid international payments, which is, after all, the sole aim of the control system. However, indications are that, despite the consistent stand of the Finance Ministry, the control will be partially lifted very soon.
Fundamentally the situation still has not been remedied. In addition to the two major measures considered (relaxing of the virtual export ban to Manchoukuo and North China and reformation of the "link" system), officials and spinners have other plans which they think may partially sileviate the situation.
For example, spinners and the Government are negotiating for the establishment in Manchioukto of spinning plants, utilizing the looms' "sealed" in connection with the reduction of production here. The difficulty is that even the mills now established in Manchoukuo cannot get all of the raw cotton they need be-ouse of the limitations set by Japan n order that this country may secure North China cotton.
A difficulty is that the large mills envisaged by officials would preclude participation by the small firms who Rave not enough sealed looms to: set up a plant under such regulations. and who therefore see in the plan a move by which the larger firms will benefit at their expense.
Text read from the printed page and cleaned; old type leaves the occasional error.