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Light industry, petrochems get boost

CHINA'S State Council yesterday approved special stimulus packages for light industry and petrochemicals, promising tax incentives and additional loan support in its latest series of moves targeting specific sectors of the economy.

The plans feature increases in export tax rebates, added loans and other financial support for small and mid-sized light-industry firms, the Cabinet said in a statement. Details were not revealed.

"To revitalize light industry, China must adopt comprehensive measures to boost demand in both urban and rural markets and expand international markets," the statement said.

It added that the industry plays a key role in enriching people's lives and serves to boost the consumer market, create jobs and serve the farm sector.

Light industry, usually less capital intensive than heavy industry and more consumer oriented, includes businesses such as home appliances, toys and paper making.

The Cabinet also decided to expand a national program to subsidize the purchase of home appliances such as washing machines and televisions in the countryside, where incomes are lower.

Two new products, microwave ovens and electromagnetic ovens, were added to the subsidy list. And each rural family is now allowed to purchase two articles in each product category under the scheme, up from the previous one, according to yesterday's statement.

China will also accelerate technology upgrades in sectors such as paper, appliances and plastics to enhance energy conservation and environmental protection. It will also step up control over food processing and encourage cross-provincial mergers and acquisitions and the creation of specific industry clusters.

On the petrochemical front, China will speed up construction of major ethylene projects while eliminating outdated petro capacity.

The statement didn't specify the size of the investment, however.

Earlier press reports said the package would include 100 billion yuan (US$14.6 billion) in investment to upgrade oil products and another 400 billion yuan for the construction of 20 large-scale petrochemical projects and overseas acquisitions.

In recent weeks, China has approved industry-specific packages for autos, steel, textiles, machinery manufacturing, shipbuilding, electronics and information technology, on top of its 4-trillion-yuan fiscal stimulus plan unveiled in November to boost the slowing economy.


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