China will expand an existing subsidy scheme to encourage the purchase of new vehicles and home appliances to boost domestic spending, the Chinese government said on Tuesday. China will allocate 5 billion yuan ($733 million), up from the original budget of 1 billion yuan, for owners of light trucks and passenger vans who upgrade to new models, China's cabinet, the State Council, announced.
The government will also set aside 2 billion yuan to subsidise the buying of television sets, washing machines, air conditioners and personal computers, covering about 10 percent of the purchase price. It was not clear whether the bigger subsidies had already been included in the government's 2009 budget or whether it represented new spending.
China announced a nation-wide subsidy programme for the purchase of home appliances last year and for cars this January. It has subsequently rolled out a series of incremental expansions to bolster the original programmes.
"This will help boost domestic consumer demand and improve energy efficiency," the cabinet said. Beijing has been trying to coax ordinary Chinese to spend more money, in the hope that consumption and massive public investment can compensate for the collapse in China's exports brought about by the global financial crisis.
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