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(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) this year, according to an official notice published Wednesday by China’s top economic planner and the Ministry of Finance. The benefit is capped at 500 yuan for at most one device in each category.
The authorities will also expand the types of home appliances eligible for state support to 12 from eight last year to include products such as dishwashers and rice cookers, 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.
A trade-in subsidy for electric cars and hybrids was also renewed. The cash-for-clunkers program gave a big boost to sales — especially of EVs and hybrids — after its introduction last year, with more than 3.7 million vehicles purchased under the program.
New agricultural machines are added under an initiative to subsidize industrial equipment upgrades. Companies in sectors such as electronic information and work safety are included to get the benefit this year.
Speaking at a briefing on Wednesday, 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.”
“We will strengthen and expand the program this year, and our general consideration is to increase the funding scale, broaden the products to be supported, optimize the implementation mechanism and amplify the multiplier effect,” he said.
Investors were unimpressed by the latest effort, sending stocks tumbling in the morning. They erased the losses briefly in afternoon trading on purchases by ETFs known to be favored by the so-called national team before falling again. The benchmark CSI 300 Index of onshore shares fell 0.2% while Chinese stocks trading in Hong Kong shed 0.9% as of 3:13 p.m.