China will allocate 300 billion yuan ($41.40 billion) in ultra-long treasury bonds to support a programme of equipment upgrades and consumer goods trade-ins, the government said on Thursday, in the latest step to spur an economic recovery.
About half the planned bond funds will be used for supporting consumer goods trade-ins, according to a notice issued by the National Development and Reform Commission (NDRC), the state planner, and the finance ministry.
China will raise subsidies for qualified buyers of new energy passenger cars to 15,000-20,000 yuan each, according to the notice.
Buyers of some home appliances including televisions, air conditioners and computers will get subsidies equivalent to 15%-20% of their sales prices, but the subsidy for each item will not exceed 2,000 yuan, said the notice.
"We believe this policy will play a positive role to drive up the consumption market in the second half of this year," Zhao Chenxin, deputy head of the National Development and Reform Commission (NDRC), said at a media briefing on Thursday.
All of the 300 billion yuan will be disbursed by the end of August, Zhao said.
Retail sales, a gauge of consumption, grew only 2.0% in June, the slowest growth since December 2022.
China's consumption faces "relatively big pressures" in the first half of this year, said Xu Xingfeng, an official at consumption department of the commerce ministry.
"If we can stabilise the 'four guardians' of auto, home appliances, household products and catering, we can stabilise consumption," Xu said.
China will lower project application requirements for using ultra-long special sovereign bonds to support equipment upgrades of small and medium-sized firms, according to the notice.
Authorities will bar local governments from using the bond funds to repay local debt and balance local budgets, it said.
The steps followed a pledge last week by China's cabinet to increase support for the programme which was aimed at spurring investment and consumption amid a shaky economic recovery.
China plans to sell 1 trillion yuan of special treasury bonds this year, as part of a broader effort by authorities to revive key sectors of a struggling economy.
China will lower project application requirements for using ultra-long special sovereign bonds to support equipment upgrades of small and medium-sized firms, according to the notice.
($1 = 7.2465 Chinese yuan)
