China expands rural subsidies for cities

The decision by an executive meeting of the State Council is meant to pump up China's domestic demand, supporting domestic industries hit by a slump in demand for exports and encouraging use of more energy-efficient, less polluting cars and appliances, said a statement on the government's Web site.

Areas 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 mainly on boosting sales of small vehicles and appliances in the rural areas.

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, late Monday are meant to create about 3 million jobs.

The government gave no specific dollar amount for those programs, and it was unclear whether or not some costs are included in a 4 trillion yuan (US$586 billion) economic stimulus package announced late last year, which focused on construction projects.

But leaders had promised additional help if the earlier package failed to give the economy the oomph it needs to overcome the blow to its export sector from the global downturn.

According to the State Council's announcement, Beijing will spend a total of 5 billion yuan (US$732 million) on subsidies to consumers who trade in older vehicles for new ones. It will devote 2 billion yuan (US$290 billion) to the appliance subsidy program, which will pay rebates of 10 percent of the purchase price.

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