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Booster plan to aid China's IT industry

CHINA has drafted a plan to boost the information technology industry during the current tough economic environment, following measures supporting the textile and machinery industries, sources said yesterday.

The measures in the plan include speeding up the establishment of a special fund, more bank loans and increased government subsidies for some products focusing on flat panel displays, next-generation telecommunications and integrated circuit sectors, the Guotai Jun'an Securities Co said in a report.

China's Cabinet will consider the IT plan which also aims to boost exports by adjusting tariffs and increasing domestic sales by providing capital and subsidies, the Securities Times reported yesterday.

"Telecommunications equipment makers, like ZTE, will benefit from the plan from 2009 to 2010, because of the increased spending and the already huge investment in 3G," said Chen Liang, a telecommunications analyst at Guotai Jun'an.

The plan will also boost home appliance makers as the country has started to subsidise televisions, mobile phones and computers for farmers, industry insiders said.

Software and integrated circuit firms are also expected to get more support from the government.

For example, Datang Telecom Group, owned directly by the central government, has spent US$171 million to acquire shares of Semiconductor Manufacturing International Corp. The companies said on Wednesday in Shanghai that they will jointly develop the chip for TD-SCDMA (time division-synchronous code division multiple access), the home-grown 3G technology.

As well as the stimulus plan for IT, the State Council has already approved plans, including tax incentives and other measures, on the auto, steel, textile and equipment-manufacturing industries.

China announced a US$586-billion stimulus package in November.



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