BEIJING, April 3 (Xinhua) -- China's textile industry reported profits of 11.2 billion yuan (about 1.4 billion U.S. dollars) in the first two months of 2007, up 38.7 percent on the same period last year.

    Statistics from the National Development and Reform Commission (NDRC) said the added value of the textile industry grew 17.9 percent year-on-year in the January-February period.

    The profits were achieved despite higher cotton costs in the first two months. By the end of February, the price of cotton in China stood at 13,032 yuan per ton, up 179 yuan from the end of 2006.

    Textile website analyst Li Jun said that the rising price of cotton showed that there was strong demand in the market.

    Textile exports were buoyant in the first two months of the year, growing 30 percent to far outstrip the forecast of 15-20 percent.

    Textile exports posted a year-on-year rise of 25 percent to reach 147 billion yuan last year.

    China Securities Journal commented on March 28 that the country might reduce the garment export rebate rate by two percent in mid-April, which would help to rein in the soaring trade surplus.

    However, NDRC officials later denied such plans.

    Chinese textile enterprises recorded profits of 88.3 billion yuan in 2006, up 28 percent from a year earlier.

    NDRC experts forecast that China's textile industry would grow by more than 15 percent in terms of output value, profits and exports year-on-year in 2007.