Shares of home appliance, food and paper-making manufacturers surged yesterday after media reports said China would unveil a stimulus plan for the light industry, including favorable taxation and more government support, to spur domestic consumption and upgrade industrial structure.
The stimulus package, which may come as early as March, is expected to include a lower consumption tax on alcohol, cosmetics and jewelry, according to Shanghai Securities News yesterday, citing unnamed sources.
The central government also plans to impose higher tariffs on imported luxury products to boost sales of domestic firms and raise tax rebates for 631 light industrial products such as home appliance, furniture, leather and hardware equipment, the newspaper added.
"The stimulus plan would help to rebuild market confidence as its impact would cover most of the industrial products," said Zhang Qi, an analyst with Haitong Securities Co Ltd.
Tsingtao Brewery, the largest Chinese beer maker by market value, rose 3.72 percent to 20.90 yuan (US$3.06) yesterday, compared to a 0.19-percent dip for the Shanghai Composite Index. Hisense Electric Co jumped 3.18 percent to 8.77 yuan.
China is counting on a 4-trillion-yuan economic stimulus package and expanding domestic consumption to battle an economic downturn amid the global financial crises.
It aims to launch stimulus plans targeting nine major industries, including steel, auto, equipment manufacturing and textiles, to rev up recovery.
The latest government drive would benefit major light industry manufacturers, which were forced to cut jobs and shut down plants after suffering an export slump and weak domestic demand.
The plan for light industry also called for subsidies on a wider range of home appliances sold in the countryside.
(Shanghai Daily February 12, 2009)
