On October 30th, the textile industry received dual policy benefits! Substantive breakthroughs have been achieved in the China-Us economic and trade consultations in Kuala Lumpur, and policies of tariff reduction and relaxation of export control have been implemented. Meanwhile, the Federal Reserve cut interest rates by 25 basis points as expected. Although it sent a signal of pause, market liquidity improved. The dual benefits pushed up domestic and foreign cotton prices steadily, injecting strong confidence into the import and export trade and production and operation of the textile industry.

The China-Us consultations have reached multiple consensuses, and the textile import and export industry is enjoying policy dividends

According to an authoritative report by Xinhua News Agency on October 30th, the economic and trade teams of China and the United States reached a number of key consensations during the consultations in Kuala Lumpur, covering multiple areas closely related to the textile industry such as tariff adjustments, export controls, and investigation measures. A spokesperson for the Ministry of Commerce said that both sides will jointly implement the important consensus reached by the two heads of state during their meeting in Busan, South Korea, and inject certainty into China-Us economic and trade cooperation.

Good news has also come from the field of export control. The US side announced the suspension of the 50% penetration rule on export controls announced on September 29 for one year. China simultaneously suspended the relevant export control measures announced on October 9 and detailed the plan. In addition, the US has suspended the Section 301 investigation measures against China's maritime, logistics and shipbuilding industries for one year. China will also suspend its countermeasures accordingly to ensure the stability of logistics transportation and international trade channels in the upstream and downstream of the textile industry chain.

The consultations also clarified consensus on expanding agricultural product trade and handling individual cases of enterprises, and confirmed the positive commitment of the US side in the investment field. China will properly address issues related to TikTok and create a more stable environment for cross-border investment and digital operation in the textile industry.

The Federal Reserve's interest rate cut has been implemented, releasing liquidity. The fluctuation of the US dollar cannot stop the upward trend of cotton prices

On Wednesday Beijing time, the Federal Reserve announced a 25 basis point interest rate cut by a 10-2 vote, lowering the policy rate target range to 3.75%-4.00%. At the same time, it announced the resumption of bond purchases with restrictions to ease the liquidity pressure in the money market. Although this move was in line with market expectations, Chair Powell's statement that "it might be the last interest rate cut this year" exceeded market expectations, triggering a brief strengthening of the US dollar index.

It is worth noting that this resolution witnessed a rare joint opposition from both the hawkish and dovish sides: Director Milan supported a more significant interest rate cut to boost the economy, while Kansas City Fed President Schmitder opposed the rate cut due to concerns over inflation. Powell's hawkish signals led to the US stock market giving up its gains, and US bond yields rose in tandem with the US dollar. However, the cotton market, a core raw material for the textile industry, demonstrated strong resilience, supported by favorable economic and trade conditions between China and the US.