Beijing considers new round of stimulus to increase domestic consumption
Beijing is mulling a new round of stimulus to domestic consumption, with a focus on cars and appliances, to help stem the impact of a fall in exports.
Huang Hai, former assistant minister of commerce, was quoted by the China Daily yesterday as saying that 'new measures are in the pipeline' to boost domestic consumption as tax rebates and subsidies for vehicle and appliance purchases launched several years ago were expiring. The new measures may include subsidies to families living in affordable housing to buy home appliances and for consumers planning to change cars, the newspaper said.
Shen Danyang, a spokesman at the Ministry of Commerce, said last month that the government was working on new policies to encourage domestic spending, and that details would be announced this week.
Stimulus policies launched by Beijing in 2008-2009 following the global financial crisis have greatly stimulated local consumption.
Mainland consumers spent 342 billion yuan (HK$419 billion) buying 92.5 million TV sets, refrigerators, computers and other appliances by end of last year under a government-subsidised programme that allowed consumers to trade in old appliances for new ones. Another 100 million appliances were sold last year under a subsidised programme to encourage rural residents to buy appliances. Similar incentives have also been in place for cars buyers.
Jiang Feng, president of the China Household Electrical Appliances Association, expects the new measures to be less influential than earlier ones.
'The last round of stimulus policies was so successful,' said Jiang. 'Most consumers with potential demand to purchase or upgrade their appliances have done so during the past few years. New policies will certainly help the appliance market but it will be difficult to match the impact of the previous ones.'
More than 10 government agencies, including the Ministry of Commerce, the National Development and Reform Commission and the Ministry of Finance, are expected to propose more programmes to boost consumption at a meeting in April, China Daily reported.
China's exports have steadily fallen in the past few months as demand falters, especially in the European Union.
Europe remains China's single largest export market, but export growth to the continent slowed to just 5 per cent in November from a year ago, the third straight month of single digit growth and the smallest expansion since February 2011.