China prepping new stimulus package, says Bloomberg
By Duncan Ferris
Date: Wednesday 17 Apr 2019
(Sharecast News) - Chinese officials appear to be preparing a stimulus package as they aim to improve sales of items such as cars and electronics after the nation's economy showed signs of reinvigoration on Wednesday.
A report from Bloomberg suggests that the proposals include subsidies for new-energy vehicles, smartphones and home appliances, but the stimulus package remains at the proposal stage within the Chinese government.
Car sales could be stimulated by a loosening of current restrictions, which currently see prospective gasoline powered care drivers in Beijing and Shanghai having to enter a years-long lottery or pay as much as 90,000 yuan to have a chance of being allowed on the road as part of new vehicle quotas.
Other measures reportedly include subsidised trade-ins of cars and mobile phones, home appliance subsidies and exemption from taxes on used-car transactions.
Stephen Innes, managing partner and head of trading at SPI Asset Management, said: "Chinese consumers unquenching propensity to take advantage of discounts will kick in, and these subsidies will provide a massive boost for both domestic and global electronic and automotive industries."
Earlier, official data revealed that China posted gross domestic product growth of 6.4% in the first quarter of 2019 compared to the same period last year, meeting government targets, while industrial production, retail sales and fixed asset investment all improved in March on a month-by-month basis.
Even so, the country is still facing its slowest rate of economic growth in three decades amid flagging demand for exports, a sluggish property market and ongoing trade tensions with the US, though China appears close to agreeing a trade deal with Washington.
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