A stimulus package for China's textile industry is currently being drafted by the government to help the sector through the global economic crisis according to local news sources.

The Chinese press say measures submitted by the National Development and Reform Commission and the Ministry of Industry and Information Technology will include subsidised loans to boost sales and create jobs.

The news comes as profits at textile companies fell 1.8% in the first 11 months of 2008 after the global financial crisis led to lower demand for their products. This is the first time in a decade that profits have fallen.

Rising labour costs and the appreciation of the yuan against the dollar are also said to be behind slower growth in China's textile and garment exports.

Exports slowed to 8.2% last year, from growth of 18.9% in 2007, with figures from the General Administration of Customs putting total textiles and garments exports at $185.17bn in 2008.

The Chinese government has already taken steps to help its textile industry, and last year increased the export tax rebate currently given to Chinese textile and apparel exporters from 11% to 14%. In December it also cut some textile import duties.

And Beijing last week announced policies to bolster the auto and steel industries, including tax cuts and a US$1.5bn subsidy for auto makers. Help for the petrochemical sector is also thought to be in the pipeline.