China repurposes some debt for consumer goods tradein scheme
Move marks small shift in how Beijing thinks about stimulus
Programme limited in scale and marred by 39;inefficiencies39; economists

BEIJING, July 26 Reuters China39;s use of ultralong treasury bonds to fund a consumer goods tradein programme deviates from the usual playbook of boosting investment to support the economy and is fuelling expectations for more stimulus that targets household demand.

The state planning agency said on Thursday that about 150 billion yuan 20.7 billion of the 1 trillion yuan China is raising through special debt issuance this year will subsidise replacements of old appliances, cars, bicycles and other goods.

Equivalent to 0.12 of economic output and 0.3 of 202339;s retail sales, this amount is too tiny to lead to a meaningful rebalancing of the economy towards consumption or guarantee reaching this year39;s roughly 5 growth target.

It does, however, show that concerns that consumer sentiment lingers near record lows are prompting authorities to finally test measures long called for by economists that are not from the usual supplyside toolkit.

Special bonds traditionally fund strategic infrastructure and securityrelated investments.

They are changing the way they use such funds in line with the shifts in the economy, Hwabao Trust economist Nie Wen said.

This is an important change. The most striking problem facing the economy is weak demand, so expanding domestic demand will…