BEIJING (AFP) – Beijing is hoping subsidies for rice cookers, microwave ovens and smartphones can boost spending and help the country weather an economic storm from incoming US president Donald Trump.
Policymakers are trying to get China’s billion-strong army of consumers to inject cash into the economy. Last week, they expanded a subsidy scheme for common household items, from water purifiers and refrigerators to laptops and electric vehicles.
Outside a bustling shopping centre in Sanlitun, one of the capital’s most popular commercial districts, 25-year-old Li Ling told AFP the policy could work as an “incentive”.
“If someone’s budget is not very abundant, such policies can support them in their consideration about buying things,” she said.
“I think the policy can just be regarded as an incentive,” she said.
Beijing is nervously looking to the second administration of Donald Trump, who has vowed brutal tariffs on Chinese goods in retaliation for Beijing’s allegedly unfair trade practices – fuelling fears of another trade war.
And experts said the country may need to shift towards a growth model driven largely by domestic consumption as those pressures mount.
Under the broadened subsidy scheme, people can get 20 per cent off microwave ovens, water purifiers, dishwashers and rice cookers, among other things – with the state covering the discount of up to CNY2,000 (USD275).
Gadgets such as smartphones, tablets and smartwatches also now receive subsidies of up to 15 per cent.
Shopper Yang Boyun told AFP that he recently took advantage of the new deal.
“I bought three Xiaomi air conditioners,” he said, referring to one of China’s leading consumer goods brands. “They all only cost CNY8,000-9,000. Normally each one would cost more than CNY4,000,” he said.
But Yang, a worker in the property sector, said much stronger action was needed.
“Only after some changes to the macroeconomic regulation of the country will individuals feel the effects,” he said.
Beijing is set to release a tranche of economic data today and analysts expect the country to report its weakest growth in decades.
In bustling Sanlitun, student Wang Jiaxin said she was prioritising spending on things she enjoyed.
“If it’s on food and drinks and buying more beautiful clothes then I’ll spend a bit more,” she said.
Next year Wang said she planned to enter China’s job market – beset in recent years with high youth unemployment – rather than continue studying.
But she expressed cautious optimism about her chances.
“I can definitely find a job. But what kind of job it is really depends,” she said. “I’m not sure I’ll be able to find a good one, but I’ll definitely be able to support myself.”
Meanwhile, Yang told AFP his thinking on personal spending had shifted.
“In the past I may have saved some money, but now I feel that one small thing may cause debt – like if you get sick, you will be in debt,” he said.
“But money is something that should be used to enjoy the present,” he added. “Saving money is meaningless. The most important thing for us now is to be happy.”