China has pledged central government funds to encourage consumers and businesses to replace old equipment and goods, a pillar of its plan for economic growth of about 5% this year, reports Bloomberg. Equipment renewal projects can receive support from the central government budget alongside tax breaks and targeted lending from banks, China’s State Council said Wednesday.
The action plan aims to increase spending on equipment in sectors such as industry, agriculture, transport, education and healthcare by at least 25% by 2027 compared with last year, China’s top economic planning agency said in a separate statement. The statements didn’t specify the amount of government funding for the program, which was first mentioned by President Xi Jinping in February as a way of boosting demand for goods.
China’s 2024 growth target is seen as ambitious because the economy faces weak domestic demand caused by an ongoing housing slump and low confidence among businesses and consumers. Those forces are also leading to deflation, which is increasing tensions over China’s exports.