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Government stimulus could provide relief to hard-hit manufacturers

The prevailing adverse economic climate is testing the mettle of China, but the hope is that the Mainland will pull through and emerge as a more efficient manufacturing base. While export-oriented Southern China, the region where this year’s Chinaplas trade show will be hosted in May, has been hit hardest by the global economic crisis, with literally tens of thousands of small- and medium-scale enterprises closing their shutters, there remain some bright spots.

The prevailing adverse economic climate is testing the mettle of China, but the hope is that the Mainland will pull through and emerge as a more efficient manufacturing base. While export-oriented Southern China, the region where this year’s Chinaplas trade show will be hosted in May, has been hit hardest by the global economic crisis, with literally tens of thousands of small- and medium-scale enterprises closing their shutters, there remain some bright spots. Fu An, president of the Guangdong Plastics Industry Association, notes that, “The timing of Chinaplas 2009 is a crucial time for China fighting an economic downturn. It is also the moment that we can see effective implementation of China’s 4 trillion Yuan ($582 billion) stimulus package.”

The package entails investment in 10 key areas, including low-income housing, rural infrastructure, water, electricity, transportation, the environment, technological innovation and rebuilding from several disasters, most notably the May 12, 2008 earthquake in Sichuan Province, with all of the monies to be spent by 2010. Policies to be implemented also include a comprehensive reform in value-added taxes, which will cut industry costs by 120 billion Yuan ($17.5 billion) annually. [email protected]

TAGS: Business
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