MNI BRIEF: China Unveils New Stimulus For Domestic Demand

China announced new subsidies to boost consumption and equipment renewal in a bid to shore up domestic demand, according to a statement by the National Development and Reform Commission on Tuesday. 

The first batch of CNY62.5 billion in funds has already been launched, according to Xinhua. Authorities will subsidise vehicle replacement with new energy passenger and renewal with 8% of the price (capped at CNY15,000), while up to 12% of a vehicle price will be paid for scrapping. (See MNI: China To Expand Consumption Stimulus In New Year-Sources)

Consumers purchasing six categories of home appliance, including refrigerators, washing machines, televisions, air conditioners, computers, and water heaters, and four categories of other products, including phones, tablets, smartwatches and bands, and smart glasses, will receive a subsidy of 15% of the sales price.

Subsidies for equipment renewal will also be expanded, adding updates in areas such as installing elevators in old residential communities, elderly care institutions, fire and rescue facilities, and commercial facilities such as shopping malls, department stores, and large supermarkets.

The NDRC and the Ministry of Finance will allocate funds for consumer goods replacement by issuing ultra-long special treasury bonds for local governments in quarterly batches.