The State Council said on last Wednesday it has approved the stimulus package for China textile industry, which is the country’s traditional pillar industry providing about 20 million jobs but suffered severe difficulties since last year.

On one side, the government increases the tax rebate rate for textiles and garments exports by one percentage points to 15 percent that became effective from February 1 and expected to help enterprises reduce costs and make the Chinese textile exports more competitive in prices.

On the other side, China also plans to take several measures aimed at solving the enterprises’ long-term problems:
1.The government will take a proactive attitude to enlarge domestic consumption, to develop new production, expand rural markets and promote the use of textile products in relevant industries, while expanding export destinations to stabilize the share in international market.
2.To support textile companies to upgrade technology and develop domestic brands. The government would allocate a special fund for companies that produce textiles or fibers, or operate in the textile printing and dyeing sector, and also for the industrialization of hi-tech fiber manufacturing and development of textile manufacturing equipment.
3.To phase out obsolete capacity, eliminate energy-intensive, polluting equipment and technology,
4.To encourage government departments to provide financial support and insurance services to small and medium-sized textile plants.
5.To encourage textile and garment makers to relocate from southeastern parts of China to central and western areas.

The national plan of supporting the country’s 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 last week. It approved earlier this year two stimulus packages for the auto and steel sectors.