China_ Policymakers unveiled implementation details for the 2025 _dual upgrade_ plan to boost consumption

Summary of Conference Call Notes Industry Overview - The conference call focused on the consumer goods industry in China, specifically discussing the "dual upgrade" program aimed at boosting consumption and investment in 2025 [1][2]. Key Points and Arguments 1. Implementation of the "Dual Upgrade" Program: - The National Development and Reform Commission (NDRC) and other ministries announced details for the consumer goods trade-in and equipment upgrade program for 2025, which was effective in boosting consumption last year [2][6]. - Policymakers pledged to increase funding support and expand eligible goods categories in 2025, aligning with market expectations [2][6]. 2. Funding Details: - The central government special bond (CGSB) issuance quota for the program will significantly increase in 2025 compared to 2024, with an expected total government bond net issuance exceeding RMB 12 trillion [2][6]. - The first batch of funding for the consumer goods trade-in program this year is RMB 81 billion, allocated to local governments [2][6]. 3. Eligible Products: - The program will include additional products such as mobile phones, computer tablets, and smart watches for fiscal subsidies in 2025 [6]. - The home appliance category will expand from 8 to 12 sub-categories, now including microwave ovens, dishwashers, water purifiers, and rice cookers [6]. 4. Economic Impact and Expectations: - The effectiveness of the consumption stimulus relies on both funding and implementation, with the fiscal budget to be released during the March "Two Sessions" being crucial for gauging funding strength [6]. - The expected CGSB quota for 2025 may include RMB 800-1000 billion for the consumer goods trade-in and equipment upgrade program, compared to RMB 300 billion in 2024 [6]. 5. Additional Support Measures: - Policymakers emphasized the need for more transfer payments to targeted groups, particularly low-income families, to improve household income and boost consumer confidence [6]. Important but Overlooked Content - Key macroeconomic data and events leading up to the national "Two Sessions" include the Q4 GDP release on January 17, 2025, and local "Two Sessions" in January-February [6]. - The potential impact of US tariff implementations and China's responses post-US presidential inauguration were also highlighted as significant factors to monitor [6].