China’s textile industry, which employs more than 20 million people, is among “the hardest hit” by the global recession, analysts said

China, the world’s largest textile exporter, may raise export tax rebates as part of a stimulus package to revive the sector, an industry official said.

China wants to stop an economic slide after 20 million rural migrant workers lost their jobs, and has pledged to help industries including steel and agriculture. The government is considering measures including raising export tax rebates and other forms of assistance, China Central Television said Wednesday.

Still, the measures may not help because “the critical issue for the textile industry is the lack of demand,” said Bi.

Industrywide profit dropped 0.7 percent in the first 11 months of last year from a year earlier, the National Development and Reform Commission said Wednesday on its website.

The textile industry, which employs more than 20 million people, is among “the hardest hit” by the global recession, said Dong Shuzhi, an analyst at Jinshi Futures Co. in Shanghai.

Any stimulus measures probably also won’t be enough to revive cotton demand, said both Bi and Dong.

China’s cotton consumption may drop by more than a fifth to “a little over 8 million tons” in the crop year ending August 31, Jinshi’s Dong said. China used about 10.84 million tons of cotton last year, he said.

The growth of China’s cotton-spun yarn and fabric output slowed to 8.1 percent and 5.3 percent in 2008, from 16.7 percent and 12.1 percent a year earlier, according to the NDRC, the country’s top economic planner.

The Xinhua News Agency reports that a government-proposed stimulus package for the nation’s textile and machinery industry had been approved Wednesday during a meeting of the State Council, China’s cabinet, but gave no details of the plan.

Reported by Bloomberg