(Bloomberg) — China will subsidize more consumer products and boost funding for industrial equipment upgrades, ramping up a program aimed at bolstering domestic consumption in the face of growing headwinds for exports.
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Consumers will qualify for a 15% subsidy for buying new mobile phones, tablets and smartwatches under 6,000 yuan ($818), according to an official notice published Wednesday by China’s top economic planner and the Ministry of Finance. But the actual benefit is capped at 1,500 yuan per person each year, with some restrictions placed on the number of goods people can buy.
The authorities will also expand the types of home appliances eligible for state support to 12 from eight last year and include new agricultural equipment, according to the announcement.
China has made boosting consumption a higher priority this year as it looks to fight deflation amid subdued household and business confidence. Exports as a growth engine may also lose steam as trade tensions with the US will likely intensify with Donald Trump returning to the White House later this month.
Speaking at a briefing on Tuesday, Zhao Chenxin, a vice chairman at the planning body, the National Development and Reform Commission, said the program plays an important role in “expanding effective investment, boosting consumer demand, promoting green transformation, and improving people’s livelihood.”
The NDRC will arrange funds raised from the sales of ultra-long sovereign special bonds to provide loan discount for companies to upgrade to new equipment on top of the 1.5% compensation already offered by the central government.
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