The government is increasing the tax rebate on textile and garment exports by one percentage point to 15 percent and will provide financial support to textile makers to boost the sector.
The State Council, or the Cabinet, said yesterday it has approved the stimulus package for the country's textile industry, which provides about 20 million jobs.
The latest move follows two increases on the value-added tax rebate for textile and garment exports last year.
The country's textile industry saw its profits drop 1.8 percent to 104.2 billion yuan ($15.3 billion) in the first 11 months of last year, the first decline in a decade as a result of shrinking demand. Analysts said the industry had expected the tax rebate to be increased to 17 percent as a firm sign of support for the sector.
The State Council said yesterday it would allocate a special fund to support technological upgrading, as well as the industrialization of hi-tech fiber manufacturing and development of textile manufacturing equipment.
The latest stimulus plan, which analysts said underscored the textile industry's role in expanding exports and creating jobs, also encourages textile companies to develop both domestic and overseas markets and shut down polluting or inefficient plants.
Kong Jun, an analyst with China Jianyin Investment Securities, said the increase of the tax rebate is expected to help enterprises cope with short-term difficulties during the financial crisis, with other measures aimed at solving the companies' long-term problems.
He said the increased rebate would make the Chinese textile exports more competitive in prices.
Support for the textile industry has been seen as another major part of the government's campaign to maintain steady economic growth. The State Council also approved a similar support plan for the equipment manufacturing industry yesterday. It approved earlier this year two stimulus packages for the auto and steel sectors.
Source: China Daily
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