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Added paragraphs 6-8 of Societe Generale comments and added details throughout.
Beijing, March 1 (Reuters) – China’s cabinet on Friday approved a plan aimed at major equipment upgrades and boosting sales of consumer goods, according to state media.
The plan, outlined at a recent Communist Party conference, is one of a series of steps China is taking to boost its economy, which has been slowly recovering since the coronavirus pandemic.
The Cabinet announced that the government will launch new initiatives to promote the replacement of old consumer goods with new ones.
“Plans must be promptly improved, carefully organized and implemented, and the proportion of advanced production capacity must be continuously increased,” state media said, citing a Cabinet meeting chaired by Premier Li Qiang. said.
“More high-quality, durable consumer goods will enter the lives of residents.”
Analysts at Société Générale estimate that the government gave about 40 billion yuan ($5.6 billion) in subsidies to appliance buyers in a similar scheme from 2009 to 2011.
“Simply adjusting for the much larger size of GDP, subsidies will need to reach at least 60 billion yuan in 2024 to match their previous importance,” the analysts said in a note.
“The investment will continue to receive a lot of financial love.”
Chinese parliament It is expected to announce a modest stimulus package aimed at stabilizing growth at its annual general meeting starting Tuesday, but calls for a detailed roadmap for bold steps to correct the country’s deep structural imbalances. It might disappoint people.
(1 dollar = 7.1980 Chinese Yuan)
(Reporting by Albee Zhang and Kevin Yao; Editing by Christina Fincher and Hugh Lawson)
((Albee.Zhang@thomsonreuters.com; 86-13916642610; Reuters Messaging: albee.zhang@thomsonreuters.com))
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