China wants everyone to trade in their old cars, fridges to help save its economy

Subsidies will be offered to Chinese consumers who buy new EVs or other energy-conserving cars. The local authorities will share some of the costs.

Four months after President Xi Jinping flagged a proposal to help households and businesses upgrade old machinery, details are still trickling out. At a briefing earlier in April, officials from multiple departments announced the fullest version so far, and promised more to come. The sweeping programme aims to upgrade China’s stock of industrial and household equipment – taking older machines that use more energy or emit more pollution out of service, and giving a lift to consumer spending and business investment along the way.

On the household side, auto trade-ins look set to be the focus of fiscal support from the central government. Subsidies will be offered to consumers who buy new EVs or other energy-conserving cars. The local authorities will share some of the costs. There are sticks as well as carrots. New environmental standards for machinery “will force companies to get rid of some old equipment”, said Mr Ding Shuang, chief economist for Greater China and North Asia at Standard Chartered Bank, calling that “the most distinctive feature” of the plan.Much of the spending may fall within existing budget proposals and its impact is likely built into the official growth target, said Mr Ding.

The immediate GDP boost is not the only objective, Mr Wrigley said, contrasting the current programme with the emergency stimulus that China rolled out after the global financial crisis.

Source: Car News Wire (carnewswire.net)

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