One bright spot on the dim textile landscape is that some of the country's well-established textile brands have emerged unscathed from the turmoil, providing a graphic illustration of why the revitalization plan put brand promotion at the top of its agenda. In striking contrast, most of their domestic counterparts are vulnerable to market fluctuations because of their low brand recognition or lack of a brand.

Analysts say the branding campaign entails concerted efforts in terms of product quality improvements and sales networking. Those unaware of brand promotions will be at a disadvantage in cutthroat international competition, they said.

"A shakeout is coming that will weed out the weak players and push those more resilient to even higher levels," Sun said. "It cannot be a one-off endeavor, but a step-by-step process. The government will precipitate in industrial upgrading and at the same time try to cushion the shock in case of massive layoffs."

In the meantime, the sector still has growth potential, given the country's rapidly industrializing economy and cheaper labor advantages, especially in its underdeveloped central and western regions, he added.

"That's why the revitalization plan has called on the manufacturers to move their low-end processing production westwards so that they can focus on research and management in the eastern region," Sun said, "It will no longer be a battle of size, but one of innovation and branding."

According to CNTAC data, the fixed investment of the sector in central and western areas rose a robust 30 percent in 2008 compared with a 2-percent drop in the east, indicating that the geographical adjustment is gaining force.

The biggest uncertainty with the revitalization plan now is how to thaw the financial freeze of those weak manufacturers, Xu Kunyuan said.

Amid the economic downturn, the supply chain of many small producers had broken down because of a lack of cash. Worse still, the depth of their woes made obtaining funding from risk-averse banks a difficult task, which in turn rubbed salt in their wounds.

"The follow-up measures should put in place concrete financing vehicles and an adequate credit guarantee system to ease their financial pains," Xu said. "The embattled textile makers themselves should also take full advantage of the rehabilitative measures and dig their way out of the predicament," he added.

Measures to Revitalize the Textile Industry

1. Enlarge domestic textile consumption, innovate new production, expand rural markets and promote the use of textile products in relevant industries, while expanding export destinations.

2. Press ahead with technology improvement and brand promotion of textile manufacturers. Funds will be allocated for companies that produce textiles or fibers, or operate in the textile printing and dyeing sector, to upgrade their technology and develop domestic brands.

3. Phase out obsolete capacities, eliminate energy-intensive, polluting equipment and technologies. A complete market entry standard will be enacted, and mergers and acquisitions in the sector will be encouraged.

4. Optimize the industrial layout and encourage textile and garment makers to relocate from southeast China to central and western areas. The east costal textile producers can concentrate on hi-tech and energy-efficient products with high added value. Efforts also will be made to build a production base for quality cotton textiles in the Xinjiang Uygur Autonomous Region.

5. Strengthen fiscal and funding support for the sector. The tax rebate for textile and garment exports will be raised from 14 percent to 15 percent. Financial institutions are encouraged to provide credit guarantees and financing services to troubled small and medium-sized textile manufacturers. Governments and enterprises at all levels are also encouraged to reinforce purchases of cotton and factory-reeled silk.