China will increase the tax rebate rate for textile and garment exports from 14 percent to 15 percent, an executive meeting of the State Council (Cabinet) announced on February 4, 2009.

The move would reduce exporters' costs and support the textile industry, the Council said. The effective date of the new rate wasn't specified.

In a national plan to invigorate China's textile industry adopted by the State Council Wednesday, the government would allocate funds for companies that produce textiles or fibers, or operate in the textile printing and dyeing sector, to upgrade technology and develop domestic brands.

Government departments were told to provide financial support and insurance services to small and medium-sized textile plants.

The government would also announce steps intended to phase out obsolete capacity, eliminate energy-intensive, polluting equipment and technology, and encourage textile and garment makers to relocate from southeastern parts of China to central and western areas.

According to the plan, the government will take a proactive attitude to enlarge domestic consumption, innovate new production, expand rural markets and promote the use of textile products in relevant industries, while expanding export destinations to stablize the share in international market.

The textile sector is the country's traditional pillar industry and enjoys an advantage in international competition.

However, textile industry suffered severe difficulties since last year.

Figures from the country's customs showed textile and garment export of China was 185.17 billion U.S. dollars in 2008, up 8.2 percent year on year, but the growth rate was 10.7 percentage points lower than in 2007.

Experts from the Commerce Ministry (MOC) attributed the downturn to appreciation of the currency, or yuan, industry liquidity shortage and production material costs surge.

China has raised the export tax rebate rate for textiles three times since last August. The previous increase in November took the rate from 13 percent to 14 percent.

(Xinhua News Agency February 4, 2009)