Machinery industry

China hammered out a bunch of policies since the fourth quarter of last year, which benefited the crisis-hit machinery industry -- including the massive infrastructure construction plan to boost industries of auto and equipment manufacturing, and subsidies for farmers' purchase of home appliances.

These measures, aimed at expanding domestic demand, have paid off. Industrial output of China's large-scale machinery sector rose 5.4 percent year on year in the first two months of 2009. [CFP]

These measures, aimed at expanding domestic demand, have paid off. Industrial output of China's large-scale machinery sector rose 5.4 percent year on year in the first two months of 2009.

Farm machinery and automotive sectors performed well. In the first two months of 2009, output of the farm machinery sector rose 21.6 percent year on year, after subsidies were given to encourage farmers to buy farm machinery.

Cai Weici, vice-chairman of China Machinery Industry Federation, said the financial crisis would not have an immediate effect on the machinery sector. He expected the fallout would emerge this year, saying the first half of this year might see the slowest growth of the sector and the second half might see a recovery.

According to customs data, exports of mechanical and electrical products declined 20.8 percent in the first quarter.

Textile industry

Wang Tiankai, vice president of the China National Textile and Apparel Council (CNTAC), said faltering exports was the biggest challenge for textile enterprises. [CFP]

Wang Tiankai, vice president of the China National Textile and Apparel Council (CNTAC), said faltering exports was the biggest challenge for textile enterprises.

Industry output of major textile enterprises grew 5.8 percent year on year in the first two months.

However, in the first quarter textile exports declined 15.6 percent to 12.02 billion US dollars, and garment exports fell five percent to 22.05 billion US dollars.

To cushion the blow from demand contraction, the government raised the export rebate for textile and garment items to 16 percent, starting from April 1.

CNTAC spokesman Sun Weibin said higher export rebates would help restore confidence in the industry and sustain steady growth.

Sun noted the industry must try to explore the domestic market while maintaining exports.