Abstract: After undergoing the reforms of the Meiji Restoration, the modern Japanese cotton textile industry developed rapidly, and simultaneously recovered control of the domestic market, which had been “sized” by foreign goods. After the Sino-Japanese War, Japan also began exporting large quantities of textiles to China. During World War I, Japan took advantage of the conflict to squeeze out British, Indian, and American products and became the largest exporter of cotton textile goods in the Chinese market. At the same time, due to the failure of the Self-Strengthening Movement to initiate capitalist industry and enact political reform, the modernization of China’s cotton textile industry was seriously obstructed. In the 1910s China’s national industry met unexpected development opportunities. The capability to produce cotton goods and yarn steadily increased, and China’s market share increased accordingly. But, by the late 1920s, China ultimately was not able to free itself from the predicament of Japanese dumping of cotton textiles.