China to Stabilize Consumer Goods Subsidies to Boost Household Consumption

BEIJING (Reuters) - China will issue the remaining portion of its consumer goods trade-in funds in a systematic and orderly manner, with the central government now guiding local governments to use the funds at a stable pace, state media Securities Times reported on Wednesday.

The central government has allocated 162 billion yuan ($22.54 billion) out of 300 billion yuan in special treasury funds under the scheme to local governments, according to the report. The scheme, a major campaign to revive household consumption in the world's second-biggest economy, helped retail sales rise last month.

However, at least six cities and municipalities across China have suspended trade-in subsidies for car buyers in June, according to Reuters' review of government announcements. The move is seen as a temporary measure to address the impact of the COVID-19 pandemic on the auto industry and to encourage consumers to purchase new vehicles.

The trade-in scheme has been a key policy tool for the Chinese government to stimulate consumer spending and boost economic growth. The government has been encouraging consumers to trade in their old cars for new ones, with subsidies ranging from 5,000 yuan to 10,000 yuan per vehicle.

The move is part of a broader effort by the Chinese government to support the economy and stabilize growth amid the ongoing COVID-19 pandemic. The government has also implemented a range of measures to support small businesses and stabilize employment, including tax cuts and loan guarantees.

($1 = 7.1863 Chinese yuan renminbi)