The Chinese Government has placed a high priority on the development of the nation's raw wool industry. An ACIAR-sponsored workshop on sheep and wool research in China, held at Huhehot, Inner Mongolia in June 1992, examined the out-comes of ACIAR-supported projects associated with health and productivity of sheep and also with the technical, economic and institutional constraints to the production and marketing of raw wool. This report, discusses aspects of raw wool production and marketing and their implications for long-term development of the northern pastoral region of China.