Though rebate policy was originally meant to encourage textile exports, many companies decreased product prices, which has lowered the current average profit in textile and clothing trade.
Now, the Government has declined new rebate rate by 2 percent.
The textile and clothing units with a profit of under 3 percent will have to face huge difficulty.
The Vice Chairman of Shaoxing Tianma Dyeing Company said, the profit per metre cloth will be reduced by RMB0.20, and hence the industry will lose profit of millions of Yuan a year.
In the first half of 2006, the company has shifted to export new style fabric, and has obtained good benefit.
Experts pointed out that it was the only way to adjust product structure and the new rebate policy aims to promote the shift of export product.
Fibre2fashion, News Desk - China
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