As announced at the State Council executive meeting on May 19 presided over by Chinese Premier Wen Jiabao, China is to raise its subsidies for consumers who wish to replace their automotive vehicles and home appliances.
According to an official statement issued following the meeting, in an effort to stimulate spending China will increase subsidies for consumers who sell their vehicles and home appliances in order to purchase new replacements. This move is intended not only to help spur domestic consumption, but also to curb pollution.
1. Consumers who trade in their used medium-sized and small-sized trucks and certain types of medium-sized passenger cars for new ones will receive a subsidy. Subsidies will also be given to consumers who sell automobiles that no longer meet the government's emission standards, but are still within life expectancy.
2. A pilot program for home appliance replacement will start in Beijing, Shanghai, Tianjin, Fuzhou, Changsha and in the provinces of Jiangsu, Zhejiang, Shandong, Guangdong, according to the official statement. However, no specific dates were given. Buyers will receive a subsidy worth 10 percent of the price for five types of home appliance, namely, televisions, refrigerators, washing machines, air-conditioners and computers.
3. The government will raise overall subsidies for automotive vehicle replacements from RMB 1 billion ($150 million) to RMB 5 billion ($730 million) for the current year, and will allocate RMB 2 billion ($290 million) this year to encourage consumers to upgrade their home appliances.