Though the necessity to reduce China's external trade imbalance has been widely recognized, the extent of the reduction is proving more difficult than expected for some export-oriented industries to accept.

Policymakers need to pay close attention to the suffering of exporters. But any government aid to relieve their pain should not come without real progress on improving the country's export mix.

A recent survey by the China National Textile and Apparel Council found that the industry's profit margins averaged 3.9 percent last year. And two thirds of the companies surveyed reported an average profit margin of only 0.62 percent.

For an industry that employs more than 15 million workers, such paper-thin profit margins ostensibly do not bode well for itself as well as the country's employment prospects. To create enough jobs for some 10 million people entering the workforce every year between now and 2010, China simply cannot afford a massive closure of textile companies.

Yet, worse than last year, China's export growth fell significantly in the first two months this year with low-value added sectors like the textile industry bearing the brunt.

Being a labor-intensive industry that has capitalized on China's comparative advantage of low labor costs, domestic textile companies have more than doubled their exports over the past five years despite the trade barriers erected by other countries.

However, growth of the country's exports in clothing and textiles have now fallen abruptly from 20 percent last year to only 5.7 percent in the January-February period. Guangdong province, the country's largest textile export base, even reported an 11.3 percent decline in exports in the same period.

If the above-mentioned industry survey has raised concerns, the latest export growth figures should justify some government response to the hardship of textile exporters.

It is reported that the government has already sent teams to investigate. To identify some of the major causes for the decline may not be difficult.

First, the continuous appreciation of the yuan is affecting all Chinese exporters including textile companies.

The Chinese currency is approaching 7 to one US dollar now. It has climbed 3.9 percent so far this year, more than half of the 7 percent gain of last year. Faster appreciation will only make Chinese exports more expensive and erode domestic manufacturers' competitiveness.

Second, a US-led slowdown of the world economy is considerably cutting external demand for Chinese goods. Customer statistics showed that China's textile and garment exports in February dropped 32.9 percent from the previous month, though, partly due to the Chinese Lunar New Year and the severe winter weather that disrupted production and shipments.