Compiled by Caijing staff

(Caijing.com.cn) China’s three-year plan to revitalize its ailing textile industry will focus on developing domestic brands and encouraging higher value-added content, according to a statement published on the central government’s website.

China’s textile sector has been ravaged by the decline in global trade, with first-quarter apparel exports falling 5 percent year-on-year to USD 7.43 billion, according to customs data. 

“Since the second half of 2008, the global financial crisis has severely hurt China's textile industry, with falling demand leading to excess capacity, financing difficulties and job losses. China's textile industry is going through the most difficult period it has seen for years,” the statement said.

China Textile Industry Association vice chairman Wang Tiankai earlier told Caijing that the industry had petitioned Beijing for a further increase in the export tax rebate from 15 to 17 percent, to help prop up struggling small and medium-sized enterprises.

Beijing is yet to reach a decision as it weighs likely criticism from its trading partners in the U.S and EU against the need to keep unemployment in the labor-intensive industry under control.

According to the statement, the government remains confident that China’s comparative price advantage in the global market will sustain industry growth.

The plan’s target to export US$ 240 billion of textile products by 2011 appears to be conservative, as this level of growth implies an average annual rate of 8 percent, below the 8.2 percent growth rate recorded last year as the global financial crisis began to bite.

China’s textile producers operate on extremely tight margins with high exposure to shifts in the prices of raw materials and fluctuations in global demand. Clothing and footwear makers in the Pearl River Delta area suffered greatly towards the end of last year as demand collapsed, forcing thousands of factory closures.

“We must take effective measures to stabilize the domestic and foreign markets, eliminate inefficiency and optimize the use of technology to promote the sustained and healthy growth of the textile industry,” the statement said.

China aims to increase the valued-added output from textiles to 1.2 trillion yuan by the end of 2011, with an average annual growth rate of 10 percent per year, according to the details released in the statement.

A key part of its strategy is the development and promotion of around 100 domestic textile brands that can compete in the international market, with the plan aiming for these brands to account for about 20 percent of the value of total textile exports.

The plan also specifically mentions raising value-added output in central and western China.

China has so far announced detailed revitalization plans for four industries, the others being autos, steel and electronics and IT, with plans for a further six industries set to be unveiled during the course of the year. 

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