According to state media reports, China’s cabinet has approved a plan to promote the upgrading of large-scale equipment and sales of consumer goods. This plan is part of a broader effort by China to stimulate its economy, which has been experiencing weak recovery following the COVID-19 pandemic.
The government intends to launch a new initiative to encourage the replacement of old consumer goods with new ones, with the aim of increasing the proportion of advanced production capacity. The cabinet meeting, chaired by Premier Li Qiang, emphasized the need to promptly improve and implement the plan to ensure the continuous introduction of high-quality and durable consumer goods into the lives of residents.
During a previous similar scheme between 2009 and 2011, the Chinese government provided subsidies of around 40 billion yuan ($5.6 billion) to buyers of home appliances. Analysts at Societe Generale estimate that to match the significance of the previous round of subsidies, subsidies in 2024 would need to reach at least 60 billion yuan, considering the larger size of China’s GDP.
China’s parliament is expected to unveil moderate stimulus plans during its annual meeting, which begins on Tuesday. However, there may be some disappointment among those expecting a detailed roadmap of bold measures to address the country’s deep structural imbalances.
