Many stocks in the environmental protection sector saw their prices jump Monday in response to a favorable policy proposal made by China's parliamentary members at the two sessions.
The share prices that leapt to the 10 percent daily upper trading limit Monday were for listed companies that deal with water pollution treatment, such as Chengdu Xingrong Investment, Tianjin Capital Environmental Protection Group, waste plastic recycling and processing company Xinjiang Tianye Co and public utilities investment company Beijing Capital Co.
Zhengzhou-based sludge treatment firm Zhongyuan Environment-Protection Co also saw its share price increase by 5.96 percent Monday, while the benchmark Shanghai Composite Index dipped 3.65 percent and the Shenzhen Component Index fell 5.29 percent by market close Monday.
"The strong performance of environmental protection stocks is due to the market expectation of more favorable policies to be discussed and adopted during the two sessions," Huang Xiuyu, an analyst with Guangdong-based Dongguan Securities, told the Global Times Monday.
Environmental protection officials will submit two proposals on environmental protection to the National Committee of the Chinese People's Political Consultative Conference (CPPCC), the Xinhua News Agency reported Monday citing Zhang Lijun, former vice minister of environmental protection and a CPPCC member.
Many deputies of the National People's Congress, China's legislative body, have the same concerns, Xinhua reported. Similar proposals are expected from the congress in its session, which will be convened starting Tuesday.
Chinese people are increasingly concerned about the pollution of water, air and land, especially on the heels of many regions witnessing very heavy smog in terms of PM2.5, a measure of particles with a diameter of 2.5 micrometers or less, which can cause respiratory diseases.
Chinese media also recently reported serious underground water pollution by enterprises in Weifang, Shandong Province. And in late February, the Ministry of Environmental Protection reportedly turned down a request from a Beijing lawyer to publish information about the country's soil pollution, saying that it was a State secret, which led to speculation that the soil is heavily polluted.
While polluting firms in China will be hit with environmental taxes, environmental protection companies should enjoy a lower corporate income tax rate - 15 percent compared to the general 25 percent - as well as exemption from property taxes and land fees as a way of encouraging development, Jia Kang, director of the Research Institute for Fiscal Science under the Ministry of Finance and a member of the National Committee of the CPPCC, wrote on his Sina Weibo Sunday.
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