China raised tax rebates on exports of toys, textiles and more than 3,000 different products yesterday in its attempt to mitigate the impact of the slowdown world.

The Finance Ministry said that the repayment of toys rose from 11% to 14% from 1 November. That in the clothing and textiles would rise from 13 to 14%. In total, 3486 types of products – nearly a quarter of exports – will be covered.

Stephen Green, director of China research at Standard Chartered, told Bloomberg that export growth could fall from 22% in the first nine months of this year to zero or even negative growth "in 2009.

China's announcement Monday that GDP growth had fallen to 9% – very enviable to most countries but the slowest in five years – a chill through observers who hoped for a rapid expansion of the country could offset falling demand elsewhere.

The head of the planning China's economic agency pledged that it could maintain its growth rate yesterday.

"Of course, due to the recovery of the turbulence China's economic out there is some slowdown to our growth rate, but I think the Chinese economic growth will continue at a rate of 9%, "Zhang Ping, president of the National Development and Reform Commission, told reporters in Australia.

He cited strong domestic demand, adding that only 1.2% growth China last year came from exports. But other economists predict that GDP growth could fall to 7% or 8% next year.

The tax changes will be a welcome relief for exporters who have felt increasingly hard hit by soaring production costs and rapid assessment yuan, and the gloomy global economic outlook.

Speaking before the changes were announced, Wang Zhiguang, vice president of the Association Toy Industry Dongguan, Guangzhou Daily said: "In the 3800-odd toy firms in Dongguan, no more than 2,000 are likely to survive the next couple of years.

Industry in Dongguan, a manufacturing town in South China Pearl River Delta, includes 7,000 garment factories and 3,000 shoe factories. Mass manufacturers have been particularly affected because local authorities have been trying to change the region's economy toward higher value goods and services.

The toy association says that since 2006, production costs have increased 60% while contract prices have increased by only 10%. The customs office local says toy exports actually fell in the first half of this year – by 1.5% to $ 550m (£ 320m).

Xiao Yong, whose firm sells trees Christmas and gifts, told China Daily that orders by half last year's level.

"Many toymakers in Dongguan rely too much on the orders of U.S. and Europe, "he said." The financial crisis that led directly to a reduction in orders. Also, after the EU and the U.S. changed thresholds market Chinese-made toys, due to the withdrawal of the incidents of 2007, our analysis costs have increased by 25%. "

The government's approach has shifted from controlling consumer price inflation – now at a 15-month low of 4.6% – to maintaining steady growth. Analysts had expected GDP growth to fall from 10.4% in the first half to 9.7%.

State media reports have described government plans to spend their way out of the problem – a strategy he used after the Asian financial crisis in 1997, although exports to GDP was much lower. Be encouraged basic infrastructure construction and reconstruction of large area of Sichuan devastated by the May earthquake. The long-standing plans for health reform also should help.

The commission said yesterday it would raise the minimum purchasing price for wheat by up to 15.3% next year to raise incomes rural as well as increase grain output. The threshold for personal income tax, now 4800 yuan (around £ 414), can also be raised. China's economic growth has disguised rapid increase in income inequality between urban and rural areas.

Shen Minggao, chief economist the prestigious business magazine Caijing, said encouraging domestic consumption through fiscal stimulus could increase GDP growth of over 1.5 percentage points.

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