Fiscal stimulus talk stimulates stocks
Print Edition
Shanghai shares eked out small gains yesterday after the Ministry of Finance said China will step up fiscal spending this year.
The Shanghai Composite Index edged up 0.05 percent to close at 2,581.00 points.
Auto parts makers, chemical companies and material enterprises are among the biggest gainers.
The finance ministry said China will expand its positive fiscal policy, stepping up fiscal spending for the year based on current economic circumstances and spending needs.
The ministry said that China will also further cut taxes and fees.
“We believe that the gradual increase of tax and fee cuts this year will stimulate the vitality of market entities and boost market confidence in order to promote high-quality economic development,” said Xu Guoqiao, a ministry tax inspector.
China’s public budget expenditure totaled 22.1 trillion yuan (US$3.3 trillion) in 2018, up 8.7 percent year on year, according to data released by the Ministry of Finance.
The ministry is optimistic on revenue and spending this year.
Market sentiment was also lifted after China’s central bank yesterday injected 257.5 billion yuan of funds into the market via the targeted medium-term lending facility.
The targeted medium-term lending facility was introduced in December to encourage loans to small businesses.
Large commercial banks, joint-stock banks and major city commercial banks that lend heavily to the real economy and meet macro-prudent requirements can apply for the targeted medium-term lending facility.
Great Wall Motor Co rose 4.23 percent to 6.41 yuan and Jiangsu Dingsheng New Material Joint-stock Co added 3.07 percent to 20.16 yuan.
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