China, a net importer of cotton for almost 50 years, has emerged as an important cotton exporter and competitor in international markets. A government policy change initiated in 1978 established strong incentives for increased cotton production. Production surged from 10.1 million bales in 1979/80 to 28.7 million in 1984/85. China changed from the world's leading importer in 1979/80 to an important exporter in 1983/84. Current revised Chinese policy favors stable production, improved quality and larger exports.