China unveils support package to auto, steel industries 2009-01-14 19:49:20   Print

Special Report: Global Financial Crisis

°§China's State Council unveiled a support package for the auto and steel sectors Wednesday.
°§The gov't will lower purchase tax on cars under 1.6 liters from 10% to 5% from Jan. 20 to Dec. 31.
°§The plan also urges improvements in the credit system for car purchase loans.

    BEIJING, Jan. 14 (Xinhua) -- China's State Council unveiled a long-awaited support package for the auto and steel sectors Wednesday to boost the two "pillar industries".

    Under the plan, the government will lower the purchase tax on cars under 1.6 liters from 10 percent to 5 percent from Jan. 20 to Dec. 31 in a bid to stimulate sales.

    It will also allocate 5 billion yuan (730 million U.S. dollars) to provide one-off allowances to farmers to upgrade their three-wheeled vehicles and low-speed trucks to mini-trucks or purchase new mini-vans under 1.3 liters from March 1 to Dec. 31. It will also increase subsidies for people to scrap their old cars and will straighten out and cancel regulations that restrict car purchase.

    The plan encourages large auto companies, as well as major auto-part makers to expand through mergers and acquisitions so as to optimize resources and improve their competitiveness on the international market.

    In the next three years, the central government will earmark 10 billion yuan as a special fund to support auto companies to upgrade technologies, and develop new engines that use alternative energies. The government will offer financial support to promoting the use of energy-saving autos and those fueled by new energies, and support automakers to develop independent brands and build auto and parts export bases.

    The plan also urges improvements in the credit system for car purchase loans. More than 93 percent of Chinese vehicles are sold in the domestic market, but less than 10 percent are purchased on credit.

    It also requires accelerated upgrading of the steel sector, transforming "big" industry competitors into "strong" international players.

    It said the industry needed to eliminate outdated technology, and must not establish new projects that merely add to steel output.

    China also needed to increase domestic demand for steel and adopt a more flexible tax rebate policy to keep international markets.

    Special funds will be allocated from the central budget to promote technological advancement of the sector, readjustment of products mix and improvements of product quality, according to the plan.


China publishes details of real-estate stimulus package

    BEIJING, Dec. 21 (Xinhua) -- The General Office of the State Council, or Cabinet, on Sunday unveiled more details of a real-estate stimulus package adopted at an executive meeting of the Council last Wednesday.

    The document, called A Number of Opinions Concerning Boosting Healthy Development of the Property Market, was posted on the central government's official website. It emphasized low-income housing and home ownership. Full story

China Eastern Airlines to get 7 bln yuan capital injection

    SHANGHAI, Dec. 29 (Xinhua) -- China Eastern Airlines, a key aircarrier in China, announced on Monday it will get a total capital injection of 7 billion yuan through issuing more A and H shares to its holding company China Eastern Air Holding Company. Full story

China Eastern, Southern to receive 3 bln yuan state cash injection°°

   BEIJING, Dec. 11 (Xinhua) -- Two leading Chinese carriers, China Eastern Airlines and China Southern Airlines, announced they will get 3 billion yuan (441.2 million U.S. dollars) state bail-out respectively.

    CEA said in a statement filed with the Shanghai Stock Exchange that it will issue 652.18 million A shares to the government and its major shareholders at 3.6 yuan per share, and the same amount of H shares on the Hong Kong stock market at 1 yuan per share. Proceeds will be used to replenish capital flow. Full story

Editor: Lv Sha
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