BEIJING (Reuters) – China will give strong financing for firms involved in the program of equipment upgrades and trade-ins of consumer goods, government officials said on Thursday, the latest bid to spur domestic demand and support the economy.
Last month, China’s cabinet issued an action plan containing detailed measures to promote an initiative designed to boost investment and consumption.
“There will be financial support from central investment, central fiscal funds, and other sources for large-scale equipment upgrades and consumer goods trade-ins, and the support will be strong,” Zhao Chenxin, deputy head of the National Development and Reform Commission, told a news conference.
“At the same time, governments in various regions are also studying this carefully and will provide certain funds to support based on their actual financial situation.”
Annual investment in China’s equipment upgrades in key industrial and farm sectors exceeds 5 trillion yuan ($690.89 billion), and demand for the replacement of automobiles and household appliances is above 1 trillion yuan, Zhao said.
“This market space is very huge, and its contribution to economic growth is self-evident,” he said, adding that the program would not only raise consumption and investment but promote energy conservation and high-quality development.
China aims to boost equipment investment in key sectors of the economy by 25% between 2023 and 2027, alongside efforts to speed up recycling of used cars and home appliances, Zhao said.
The government will provide tax incentives and interest rate subsidies for firms involved in equipment upgrades, Fu Jinling, a finance ministry official, told the briefing.
($1 = 7.2370 Chinese yuan renminbi)
(Reporting by Beijing newsroom; editing by Christian Schmollinger and Mark Heinrich)
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