Exports of Chinese textiles will grow 15 to 20 percent in 2007, although a stronger renminbi and rising raw material costs may pose challenges to the industry.

So said Sun Jiwen, deputy director of the Foreign Trade Department of the Ministry of Commerce, in a speech yesterday to the China Textile Round Table Forum in Beijing.

The textile industry exported goods valued at $174 billion in 2006, an increase of 25 percent over the previous year.

The sector will continue double-digit growth as the world economy remains stable and domestic income rises, according to Sun.

Growing per capita income helps the industry as "domestic demand is always the most important source for growth in the textile industry", he said.

But the sector may face challenges in the years to come, he noted. An appreciation in China's currency, especially over a short period, would erode already low profit margins.

As the country adjusts to growth, some government measures though good for trade in the long run may have negative impact on the export of textiles in the short term, Sun said.

Increasing costs of raw materials such as oil and cotton would also influence profits, he added.

For manufacturers to adapt, they need to be innovative and add value to their products, said Sun Weibin, spokesman from the China National Textile and Apparel Council.

Editor: Donald