China's textile industry will slowdown expansion of production capacity, but boost upgrading of existing facilities and products in 2007, according to the China Textile Industry Association.

Du Yuzhou, chairman of the association, said the shift aims to ease international pressure over Chinese textile products flooding the global markets. 

 However, he said that exports would continue to rise despite the rising value of the yuan and a reduction in export rebates.

"It is high time we adjusted our growth pattern," said Du. 

  "Innovation is the key. Manufacturers should update their technologies and develop profitable brands," he said.

China experienced growing friction over its textile trade last year as trading partners from Europe and America imposed import quotas to contain the influx of cheap textile products from China.

According to China's General Administration of Customs, the country's textile exports amounted to four billion U.S. dollars in January, up 11.6 percent year-on-year.

The sector generated an aggregate output of 2.5 trillion yuan (about 329 billion U.S. dollars) and 88.3 billion yuan (about 11.62 billion U.S. dollars) in combined profits last year.

Du projected a 20-percent rise in industry revenue and profits this year.