China to subsidize auto, home appliance trade-in

Shanghai, May 19 (Gasgoo.com) China will subsidize consumers who replace their old cars and household appliances for new models that are energy-saving and less-polluting, in an effort to spur domestic consumption and protect the environment, the government announced today, xinhuanet.com reported.

This decision expands a subsidy program from rural areas to major cities. Areas initially qualifying for the "swapping old for new" subsidies, as they are dubbed, include Beijing, Shanghai, Tianjin and several provinces in China's affluent coastal regions. The earlier program focused on boosting rural sales of small vehicles and appliances.

According to the State Council's announcement, the central government will spend a total of 5 billion yuan ($732 million) on subsidies to consumers who trade in older vehicles for new ones. It will devote 2 billion yuan to the appliance subsidy program, which will pay rebates of 10% of the purchase price.

The plans were announced a day after the government outlined plans for revitalizing and restructuring China's light industries and its often loss-making petroleum-refining sector. Those plans, issued by the State Council, or Cabinet, this afternoon are meant to create about 3 million jobs.

Expanding domestic demand is a top priority for China, and the measures announced today reflect the country's determination to keep Chinese shoppers spending, in addition to encouraging use of more energy-efficient, eco-friendly cars and appliances.