China grants income tax relief to investment funds

China will provide temporary tax relief to investment funds in order to encourage development of the fund sector, the official Shanghai Securities News said on Thursday.

The Ministry of Finance and the State Administration of Taxation jointly issued rules temporarily exempting various securities-related activities from corporate income tax, including income on stock and bond trading and dividend income, the paper said.

China's regulators have recently stepped up approvals of new funds in a bid to bolster the slumping domestic share market, which has retreated nearly 40 percent from a record high reached last October.

Optimism over possible government moves to bolster the market helped Chinese stocks on Wednesday to snap a five-day losing streak that had knocked more than 10 percent from Shanghai's benchmark index <.SSEC>. The Shanghai index ended 2.5 percent higher on Wednesday.