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Moreover, an executive meeting of the State Council, held on November 19, discussed and identified 6 policies and measures to promote healthy development of the textile industry. The meeting also decided to suspend the policy of security margin for textile processing trade. The state will make full use of foreign trade development fund from the central government to support marketing, research and development, consolidation and mergers among textile enterprises.

However, since the effects of fiscal policies in one country normally is hysteresial, the outcome of these fiscal polices tend to be small at this stage.

When we look at the data below, we see China's production of textile products grew at a slower pace this year than last year. The growth rate of the output of chemical fibre, yarn, fabric and garment slowed sharply to single-digit levels in some cases from January to October 2008. Chemical fibre production grew 2.15 percent from January to October 2008, but that was 17.11 percentage points less than a year earlier; Yarn production grew 9.24 percent during the period, but that was 8.02 percentage points less than a year earlier��Fabric production grew 5.61 percent during the period, but that was 7.85 percentage points less than a year earlier; And garment production grew 5.11 percent during the period, but that was 8.90 percentage points less than a year earlier.

Table 1. Summary statement on textile production of China from January to October 2008 (large-scale enterprises)

Source: National Bureau of Statistics of China