6:00AM New York, 6:00PM Hong Kong- China increases textile industry tax rebate by one percentage point to 15%.

Hong Kong market averages advanced after China''s top decision making body State Council announced a one percentage point increase in tax rebate for the textile industry to 15%. Similar measures were also unveiled to support the equipment manufacturing industry.

In Hong Kong trading Hang Seng Index gained 0.9% or 115.01 to 13,178.90, and the China Enterprises Index of Hong Kong listed mainland shares, or H shares, advanced 3% or 214.09 to 7,455.81. In Shanghai trading CSI 300 index fell 0.7% or 15.44 to 2,150.97.

Daily turnover on main-board was HK$52.8 billion compared with HK$36.5 billion yesterday.

China to Increase Tax Rebate to 15% for Textile Industries

China''s State Council yesterday increased the tax rebate on textile and garment exports by one percentage points to 15% from 14% as part of a stimulus package for the industry.

Similarly a support plan for the equipment manufacturing industry was approved yesterday.

According to the report, profit in the country''s textile industry fell 1.8% to Rmb104.2 billion in the first eleven months of 2008 from a year earlier, dropping for the first time in a decade.

China Can Grow 8%, IMF

Xinhua News Agency reported today that International Monetary Fund managing director Dominique Strauss-Kahn said China has the potential to reach the 8% growth target this year, although it is very challenging.

IMF forecasts that the country''s economy will rise 6.7% this year.

Kahn said it was unlikely for Asian economies to regain lost momentum when other economies are in difficult economic circumstances.

Gainers & Losers

Hong Kong stocks gained 0.9% led by financial stocks on hopes of a stimulus package from China and ICBC advanced 3.9% and Bank of Communications increased 4.4%.

Insurance stocks gained. China Life soared 3.9% and Ping An Insurance rallied 7%.

Esprit Holdings dropped 4.8% after reporting its first quarterly profit decline in a decade and Lenovo fell 2.7 after announcing its first loss in three years.

CITIC Pacific increased 5.4%.

Shipping lines also gained as the Baltic Dry Index, a measure of freight charges, edged up 15%. China Cosco increased 14.4%.