China is committed to a ‘renewal plan’ of US$696 billion to reactivate consumption

He Chinese Government seeks to boost its economy, to do so it published a plan to promote the renewal of machinery or the delivery of consumer goods as part of the payment to acquire new ones that, according to the local press, will give a new boost to national consumption by opening a market of about US$696,000 million.

This new program, which had already been advanced during the annual session of the National Popular Assembly (ANP, which is part of Congress) held earlier this month, “it will bring higher quality and more durable consumer goods to citizens, it will pave the resource recycling chain” and will promote “the green transformation” of the second world economy, the official newspaper noted last night Global Times.

The initiative contemplates around twenty key tasks in five sectors, among which the two mentioned stand out or the recycling of used goods, the raising of standards, the strengthening of regulations or fiscal and financial support plans.

The objective is that, by 2027, investment in machinery – which includes sectors such as agriculture, heavy industry, construction or transportation, among others – has increased more than 25% compared to 2023.

Others of The aforementioned goals are a rate greater than 90% in the penetration of digital research and development (R&D) tools. and design in the country’s main industrial companies or a recycling volume of scrapped vehicles that is almost double that of 2023.

China’s expectations for 2027

By 2027, the plan adds, Transactions of used vehicles will increase by around 45% in China, while recycling of used appliances will grow by 30%.

The director of the National Commission for Reform and Development (CNRD, the country’s main economic planner), Zheng Shanjie, assured on the 6th that this ‘plan to renew‘ on a large scale will create a “enormous” market of more than 5 trillion yuan (US$ 694,803 million).

“At the end of last year, the number of civilian vehicles in China reached 336 million, while the number of household appliances such as refrigerators, washing machines and air conditioners exceeded 3 billion units. Thus, the renewal of consumer goods such as automobiles and household appliances is expected to create a trillion-yuan market.”Zheng advanced.

He Economist Tian Yun, cited by Global Times, anticipated that consumer spending will rebound around 6% year-on-year this year in China, something “fundamental” for the country to meet the official goal ofe economic growth of “around 5%”, described as “ambitious” by some analysts.

Low national and international demand, risks of deflation and insufficient stimuli, together with a real estate crisis that has not bottomed out and a lack of confidence within the private sector are some of the main causes that analysts put forward to explain the situation in the second largest world economy.