China Takes Bold Step and Injects an Incredible $225 Billion to Subsidize Purchases of Cars and Appliances

Written by Alisson Ficher

Published on 30/07/2024 at 20:42

Updated on 30/07/2024 at 20:43

Carros elétricos da China. (Imagem: reprodução)

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In a Bold Move, China Announced a Stimulus Package of Approximately 300 Billion Yuan, About 225 Billion Reais to Boost Internal Consumption, Focusing Mainly on Passenger Vehicles and Consumer Electronics.

This program, announced by the National Development and Reform Commission and the Ministry of Finance, will be financed through the issuance of special treasury bonds.

Subsidies for trading gasoline vehicles for new energy vehicles will double to 20,000 yuan, while gasoline vehicle swaps will increase from 7,000 yuan to 15,000 yuan.

According to information from the newspaper Valor Econômico, the measure aims to revitalize the automotive industry, which accounts for around 10% of the GDP of China, but has faced a decline in sales in recent months.

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Stimulus for the Electronics Sector

In addition to vehicles, the Chinese program also includes subsidies for eight types of electronic products, such as refrigerators, washing machines, and televisions.

These subsidies will amount to 15% of the sale price, up to a maximum of 2,000 yuan per product.

These initiatives are not only a response to slow internal consumption but also an attempt to reduce overproduction capacity, which has led to excess inventory being exported to other countries.

Observers believe, the cited newspaper reported, that these measures aim to sustain domestic demand and alleviate external pressure.

Subsidies in Brazil

In Brazil, the subsidy scenario for similar sectors is not as robust as in China, but significant efforts are also underway.

Until July 2024, the Brazilian government has been offering tax exemptions and various incentives for electric and hybrid vehicles. For example, there is an exemption from the Industrialized Products Tax (IPI) and from PIS/COFINS for these vehicles.

Additionally, some Brazilian states, such as São Paulo, offer exemption from IPVA for electric and hybrid vehicles. The city council of São Paulo also enacted a law allowing part of the IPVA amount to be converted into credit for payment of IPTU.

These incentives aim not only to stimulate the purchase of more sustainable vehicles but also to foster an adequate infrastructure to support this new demand.

In the electronics sector, Brazil does not have a subsidy program as comprehensive as China’s.

However, initiatives to promote energy efficiency and the modernization of industrial equipment are underway.

In 2023, for example, Brazil allocated around R$ 3 billion in incentives for energy efficiency and industrial modernization projects.

Difference Between Brazil and China

The Chinese initiative to inject billions to subsidize the purchase of cars and household appliances highlights the difference in governments’ approaches to stimulating the economy.

While China bets on a large stimulus package, Brazil focuses on tax exemptions and specific incentives for strategic sectors.

How these policies will impact the economy and consumer market in both countries will still be seen in the coming years.

Do you think Brazil should follow a model similar to China’s and invest more aggressively in subsidies to stimulate the economy? Leave your opinion in the comments!

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Tico m

#31827

03/08/2024 07:47

Faltou informar que atualmente a grande preocupação que deveria ser de ajudar o consumidor e o mercado interno, o governo está com taxas absurdas. Quem abre alguma coisa investe ou compra algo neste ambiente absurdo.

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Silvio Alves

#31719

02/08/2024 22:49

Eu acho que o Brasil deveria gastar bem menos com a máquina administrativa… só isso resolveria boa parte dos nossos problemas!

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Samuel

#31059

02/08/2024 03:55

Com certeza o Brasil está tímido quanto a antecipa o equilíbrio do sucesso

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China Takes Bold Step and Injects an Incredible $225 Billion to Subsidize Purchases of Cars and Appliances

In a Bold Move, China Announced a Stimulus Package of Approximately 300 Billion Yuan, About 225 Billion Reais to Boost Internal Consumption, Focusing Mainly on Passenger Vehicles and Consumer Electronics.

Stimulus for the Electronics Sector

Subsidies in Brazil

Difference Between Brazil and China

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China Takes Bold Step and Injects an Incredible $225 Billion to Subsidize Purchases of Cars and Appliances

In a Bold Move, China Announced a Stimulus Package of Approximately 300 Billion Yuan, About 225 Billion Reais to Boost Internal Consumption, Focusing Mainly on Passenger Vehicles and Consumer Electronics.

Stimulus for the Electronics Sector

Subsidies in Brazil

Difference Between Brazil and China

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Egypt wants to draw 10 million cubic meters of water from the Nile per day into the desert, irrigate a new agricultural frontier, and build a city where there is currently only sand.

Norway is drilling 27 kilometers of rock 392 meters below the bottom of a fjord to build the world’s largest and deepest underwater road tunnel — when completed, a 21-hour journey will be reduced to 10.

An astronaut spent 340 days in space while his twin brother stayed on Earth, and NASA found a “rejuvenating” effect, genes, microbiome, cognition, and immune system that revealed the biological cost of living outside the planet.

Xiaomi launches new smart stove with titanium sensor and automatic shutdown that detects an open flame without supervision.

China has just successfully tested the world’s first ground effect maritime vehicle, a craft that flies up to 6 meters above the water at 200 km/h, uses quantum technology and 6G communication, and can rescue patients in the middle of the ocean.

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