As approved by the State Council, the Ministry of Finance and the State Administration of Taxation jointly announced a third-time rebate adjustment as from 1st June which is the 7th time consecutive readjustment since August 2008 that the government has done to help textile makers cope with stagnant demand. The adjustment covers dozens of industries and more than 2600 items of goods including further process of agricultural products, electromechanical, headwear and footwear products as well as the slackened steel industry products. Nonetheless, textile and garments exporting tax rebate remains unadjusted this time.

Ever since the repeated tax rebate raise from 2008, textile and garment manufacturers of substantive numbers still cannot walk out the negative value profit margin shadow. Masses of textile industries announced bankruptcy. Second quarter of 2009 is widely acknowledged as a horribly difficult time for almost all textile sectors. Stuck in this unprecedented predicament, it is getting unavoidable and extremely urgent that the whole industry needs a right-on-action reshuffle and industry upgrade.

China´s textile industry`s low-cost and low-price development model has not changed despite the country´s great efforts to press for industrial upgrades in recent years.

Some textile producers have complained that the central government didn´t commit enough to boost the industry in its stimulus program, citing the one percentage tax rebate increase for textile and garment exports from the 15 percent to 16 percent as inadequate. Such complaints ignore the central government´s intention to rejuvenate the country´s textile industry through its own structural adjustment and upgrades.
Facing shrinking outside demand, the textile industry should take practical measures to push forward structural adjustments to consolidate its role in expanding the country´s employment.

Major machinery manufacturers are encouraged to merge to develop a large enterprise group with obvious advantages in project contracting, international trade and financing. To this end, the textile and machinery manufacturing industries should first do their utmost to press ahead with long-overdue structural adjustment under the robust aid of the central government.

Source: China Textile Leader