Chinese authorities have decided to carry out a large-scale upgrade of equipment and exchange of consumer goods to stimulate domestic demand, allocating 300 billion yuan (41.5 billion U.S. dollars) in special treasury bonds, Yicai reported on July 26.
The National Development and Reform Commission (NDRC) and the Ministry of Finance of the People’s Republic of China jointly unveiled new measures aimed at stimulating China’s economic recovery.
According to Zhao Chenxin, deputy director of the NDRC, about 148 billion yuan of the bonds will be used to upgrade equipment, and about 150 billion yuan will be allocated to local governments to implement their independent trading programs for old consumer goods.
The measures expand the scope of support and raise subsidy standards, Zhao said. They extend special support from treasury bonds to upgrade power and electrical equipment, old elevators, energy conservation, carbon emission reduction and safety reform in key industries, Zhao added.
Trade in consumer goods includes individual consumers upgrading passenger cars, trading in home appliances and electric bicycles, renovating old houses, kitchens and bathrooms, and purchasing materials for home renovations tailored to the needs of the elderly, Zhao said.
The measures change the proportion of funds paid by the central and local governments to ease pressure on local fiscal spending, said Fu Jinling, head of the economic construction department of the Ministry of Finance. Subsidy funds for recycling and refurbishing old cars and trucks, refurbishing new energy buses and batteries, and exchanging old home appliances will be paid by the central and local governments at a ratio of 9:1, Fu said.
Local governments should make proper use of subsidy funds and should not use them to balance the budget and pay off debts, Fu stressed. They should crack down on illegal repairs of old appliances that want to sell at high prices, avoid regional protectionism and treat domestic and foreign brands equally, Zhao said.
Economic statistics show that China’s six-month gross domestic product rose 5 percent from a year earlier, maintaining a recovery trend but with short-term fluctuations, according to Zhongtai Securities. Large-scale upgrading of equipment and sharing of consumer goods will play an important role in more fully unlocking the potential of domestic demand. When implementing the policy, efforts should be spared to improve the efficiency of using funds and select high-tech projects that can stimulate the development of a particular industry and even the entire supply chain, so that large-scale upgrading of equipment and sharing of consumer goods can accelerate economic growth and improve people’s living standards, said Bai Ming, a member of the Academic Committee of the Chinese Academy of International Trade and Economic Cooperation under the Ministry of Commerce.
Source: Rossa Primavera
I am Michael Melvin, an experienced news writer with a passion for uncovering stories and bringing them to the public. I have been working in the news industry for over five years now, and my work has been published on multiple websites. As an author at 24 News Reporters, I cover world section of current events stories that are both informative and captivating to read.