China's plan to boost sports spending in the run up of the Olympics'

China's plan to boost sports spending in the run up of the Olympics'

Shares of sneaker manufacturers and other sports companies jumped as Beijing introduced an effort to increase the numbers of fitness trainers and people exercising regularly over the next five years. Al Kou Volcano surged as much as 12% while Anta Sports Products Ltd. advanced 10%, with both Hong Kong-listed sportswear makers pushing back to fresh highs.

China's plan to boost sports spending in the run up of the 2022 Winter Olympics is providing a bright spot for frazzled traders who have seen a raft of new rules spark selloffs in a number of sectors from education to technology. President Xi Jinping's attempts to address inequality in the Chinese economy is causing investors to rethink their plays for two of the biggest equity markets in China.

'We believe with its increasingly sophisticated facilities and guidelines to call for sports participation, China is well positioned to grow its sports industry, Goldman Sachs Group Inc. analysts including Michelle Cheng wrote in a note. The firm maintained a buy rating on Li Ning and Anta, which said both should benefit from industry growth and the China-chic trend''.

The pledge to promote the sports industry stands in stark contrast to recent attacks on the education and technology sectors as China looks at reining in private enterprises it blames for exacerbating inequality, increasing financial risk and challenging the government's authority. On Tuesday, state media attacked the spiritual opium' of the video game industry, which sent shares of Tencent Holdings Ltd. and other related names to tumble.

The State Council plan reiterated a goal of boosting the sector to 5 trillion yuan by 2025, a 70% increase from 2019 levels.

'It helps to fill in the vacuum left by the crackdown on after-school education business, said Zhang Zhiwei, chief economist at Pinpoint Asset Management. It also helps to reduce the unemployment rate of the young population.

China plans to increase the percentage of people participating in regularly physical activity by 2025, from 37.2% in 2020, according to the plan. That refers to doing exercises with moderate intensity at least three times a week, with each session lasting at least 30 minutes.

Some other measures listed in the plan include preserving and building more than 2,000 sports fields, fitness centers and public sports stadiums, and cultivating a group of'specialized' small and medium-sized companies in the field of fitness facilities, sports event organization and fitness equipment manufacturing.

Sportswear has been a safe haven this year as the crackdowns on the fintech, real estate and overseas listings weighed on the broader market. The benchmark Hang Seng Index has surged more than 70% and is almost 50%, crushing the performance of Li Ning which has been down 3% since last week.

The Sports Sector has also benefited from a wave of nationalism in reaction to the Xinjiang cotton controversy and excitement over return of Olympics and other sporting events.

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Last week, the retailer Topsports International Holding Ltd. raised as much as 23% in Hong Kong, among other stocks with strong gains. Lander Sports Development Co. leapt throughout the mainland Jiangsu Jinling Sports Equipment Company and China Sports Industry Group Corp. by their daily limit.