Abstract: According to the import and export trade problems of China cotton, taking the trade deficit and its inducing factors as the research object, using the data from 1992 to 2012, first briefly analyzed the general situation of China cotton trade deficit, then studied the influencing factors of Chinese cotton trade deficit from the demand factors and competitiveness factors. The results showed that, China cotton trade showed a trend of growing, the trade deficit had a tendency to expand in general, and the growth rate of trade deficit amount was larger than that of cotton trade amount; the demand factors were the direct factors of the existence of China cotton trade deficit; China cotton did not have competitiveness factors, as the revealed comparative advantage index of China cotton remained around 0.15, trade competitiveness index also showed a downward trend year by year, with the index getting more and more close to -1, further explaining the trade competitiveness of China cotton was weak. Provide the basis for prompt China cotton import & export trade present situation, provides the option to formulate reasonable trade strategy, has the vital significance.