China pledges government funds to boost economy

China’s central government is providing funds to encourage consumers and businesses to replace old goods and equipment as part of its plan to achieve 5 percent economic growth this year, Bloomberg reported on Thursday.

The plan aims to boost spending on equipment in various sectors by at least 25 per cent by 2027 compared to last year. It also seeks to double the recovery of older cars and increase the recovery of used home appliances by 30 per cent during the same period.

The programme will receive support from the central government budget, as well as tax breaks and targeted lending from banks. The exact amount of government funding for the programme was not specified in the statement released by the State Council.

President Xi Jinping first mentioned the programme in February as a way to stimulate demand for goods. The plan is expected to contribute 0.7 percentage points of growth each year until 2027, with a focus on supporting car purchases.

The government is currently developing rules and standards for implementing the car replacement programme, which could be launched in the second quarter of the year.

Chinese stocks fluctuated on Thursday, with the CSI 300 Index closing down 0.3 per cent, and the yuan trading onshore slipping 0.08 per cent against the US dollar to 7.1927.