BEIJING (Reuters) -China will step up support for its program of equipment upgrades and consumer goods trade-ins, state media reported on Friday, citing a cabinet meeting.

China will expand support for equipment upgrades to sectors of energy, electricity and batteries, the cabinet was quoted as saying.

"Large-scale equipment upgrades and replacement of consumer goods are a strong driving force, and increasing policy support will help better release the potential of domestic demand," the cabinet was quoted as saying.

China will coordinate the allocation of ultra-long special treasury bond funds to further promote equipment upgrades and consumer goods trade-ins, the cabinet said without elaborating.

The government will increase subsidies for the scrapping and renewal of used automobiles and home appliances, and provide financial support for the recycling of waste electrical and electronic products, the cabinet said.

The government will also simplify the approval procedure for the scrapping and renewal of old ships and trucks, it added.

In March, the cabinet issued a plan to support large-scale equipment upgrades and consumer goods trade-ins, in a bid to boost investment and consumption amid a shaky economic recovery.

China's retail sales rose a slower-than-expected 2% in June from a year earlier, the weakest growth in 18 months, as deflationary pressures forced businesses to slash prices on everything from cars to clothes.