China is to subsidize more consumer products and boost funding for industrial equipment upgrades, ramping up a program to bolster domestic consumption in the face of growing headwinds for exports.
Consumers would qualify for a 15 percent subsidy for buying new mobile phones, tablets and smartwatches under 6,000 yuan (US$818) this year, according to an official notice published yesterday by the Chinese National Development and Reform Commission (NDRC) and the Chinese Ministry of Finance. The benefit is capped at 500 yuan for up to one device in each category.
The authorities would also expand the types of home appliances eligible for state support to 12 from eight last year to include products such as dishwashers and rice cookers, the notice said.
Photo: EPA-EFE
The two other new consumer goods covered by the initiative this year are microwaves and water purifiers. Consumers would also get more cash compensation from the government for spending on decoration materials to refurbish homes, the notice said.
China has made boosting consumption a higher priority this year as it looks to fight deflation amid subdued household and business confidence. Exports as a growth engine might also lose steam as trade tensions with the US would likely intensify with US president-elect Donald Trump returning to the White House later this month.
A trade-in subsidy for electric vehicles (EVs) and hybrids was also renewed. The cash-for-clunkers program gave a big boost to sales — especially of EVs and hybrids — after its introduction last year, with more than 3.7 million vehicles purchased under the program.
New agricultural machines have also been added under an initiative to subsidize industrial equipment upgrades. Companies in sectors such as electronic information and work safety are included to get the benefit this year.
NDRC Vice Chairman Zhao Chenxin (趙辰昕) said yesterday the program plays an important role in “expanding effective investment, boosting consumer demand, promoting green transformation, and improving people’s livelihood.”
Investors were unimpressed by the latest effort, sending stocks tumbling in the morning. They erased the losses briefly in afternoon trading on purchases by exchange traded funds known to be favored by the “national team” before falling again. The Shanghai Composite index barely moved at the close, while Hong Kong’s Hang Seng Index dropped nearly 1 percent.
The authorities would continue to distribute ultra-long special sovereign bond funds among local governments to help them hand out subsidies to consumers under the program this year, the notice said.
The central government has already extended 81 billion yuan to local authorities to support the program this year, senior Chinese Ministry of Finance official Fu Jinling (傅金玲) said at the briefing.
The authorities would also arrange funds raised from the sales of ultra-long sovereign special bonds to provide loan discounts for companies to upgrade to new equipment on top of the 1.5 percent compensation already offered by the central government, the ministry said.
Quanta Computer Inc (廣達) chairman Barry Lam (林百里) is expected to share his views about the artificial intelligence (AI) industry’s prospects during his speech at the company’s 37th anniversary ceremony, as AI servers have become a new growth engine for the equipment manufacturing service provider. Lam’s speech is much anticipated, as Quanta has risen as one of the world’s major AI server suppliers. The company reported a 30 percent year-on-year growth in consolidated revenue to NT$1.41 trillion (US$43.35 billion) last year, thanks to fast-growing demand for servers, especially those with AI capabilities. The company told investors in November last year that
Intel Corp has named Tasha Chuang (莊蓓瑜) to lead Intel Taiwan in a bid to reinforce relations between the company and its Taiwanese partners. The appointment of Chuang as general manager for Intel Taiwan takes effect on Thursday, the firm said in a statement yesterday. Chuang is to lead her team in Taiwan to pursue product development and sales growth in an effort to reinforce the company’s ties with its partners and clients, Intel said. Chuang was previously in charge of managing Intel’s ties with leading Taiwanese PC brand Asustek Computer Inc (華碩), which included helping Asustek strengthen its global businesses, the company
Taiwanese suppliers to Taiwan Semiconductor Manufacturing Co. (TSMC, 台積電) are expected to follow the contract chipmaker’s step to invest in the US, but their relocation may be seven to eight years away, Minister of Economic Affairs J.W. Kuo (郭智輝) said yesterday. When asked by opposition Chinese Nationalist Party (KMT) Legislator Niu Hsu-ting (牛煦庭) in the legislature about growing concerns that TSMC’s huge investments in the US will prompt its suppliers to follow suit, Kuo said based on the chipmaker’s current limited production volume, it is unlikely to lead its supply chain to go there for now. “Unless TSMC completes its planned six
Power supply and electronic components maker Delta Electronics Inc (台達電) yesterday said it plans to ship its new 1 megawatt charging systems for electric trucks and buses in the first half of next year at the earliest. The new charging piles, which deliver up to 1 megawatt of charging power, are designed for heavy-duty electric vehicles, and support a maximum current of 1,500 amperes and output of 1,250 volts, Delta said in a news release. “If everything goes smoothly, we could begin shipping those new charging systems as early as in the first half of next year,” a company official said. The new
RSS