Microwave ovens, water purifiers, dish-washing machines and rice cookers will be included in the trade-in scheme for home appliances this year, according to a document issued by the top state planner and the finance ministry on Wednesday. Cellphones, tablet computers, smart watches and bracelets under CNY6,000 (US$818) could get 15% subsidies.
The statement did not specify the total cost of the incentives, however, a finance ministry official said at a press conference on Wednesday that the government had so far allocated CNY81 billion ($11.05 billion) for consumer goods trade-ins to support consumption in 2025.
The new measures are part of a broader plan to spur growth in the world’s second-largest economy in 2025, where a severe property crisis has eroded consumer wealth and hurt household spending.
China’s struggling consumer sector has been a particular pain point for the economy with analysts and policy advisers calling for urgent measures to get households spending again.
“We expect the total subsidies to double in size to CNY300 billion in 2025. This marks somewhat a policy pivot towards more consumption,” said Xu Tianchen, senior economist at the Economist Intelligence Unit.
However, more limited subsidies for phones and tablets, at less than CNY500 per item, suggest Beijing does not intend to subsidise the rich for large-ticket spending, he added.
China last year apportioned about CNY150 billion from the 1 trillion yuan special treasury bonds issuance to subsidise replacements of old appliances, cars, bicycles and other goods.
Officials said that campaign “had achieved positive effects”
The campaign resulted in CNY920 billion in auto sales and CNY240 billion of home appliances sales in 2024, Li Gang, an official from the commerce ministry, said at the same press conference.
However, investors found little cheer in Wednesday’s announcements, with China’s consumer electronics stock index down 3.2% by midday break.
A state planner official last week said China would sharply increase funding from ultra-long treasury bonds in 2025 to spur equipment upgrades and consumer goods trade-in scheme. Last year, China earmarked a total of CNY300 billion for these initiatives.
Zhao Chenxin, vice head of the National Development and Reform Commission (NDRC) – the state planner – said on Wednesday funding figures for the schemes would be released during the annual parliamentary meeting in March.
‘High-end, smart and green’
Top Chinese leaders have vowed to “vigorously” boost consumption and expand domestic demand “in all directions” this year.
Reuters reported last week that millions of government workers across China were given wage increases, as part of efforts to boost consumption.
“We expect that more supportive policy as well as a more supportive base effect will help retail sales growth rebound in 2025 compared to 2024,” said Lynn Song, chief economist of Greater China at ING.
“Household consumption recovery will depend on asset price stabilisation as well as improved confidence on employment prospects.”
According to the policy document, China would also increase funds from the ultra-long special treasury bond issuance to support equipment upgrades in key areas.
Equipment used in the information technology and agriculture sectors will now be included in the campaign, with coverage focusing on high-end, smart, and green equipment.
On the basis of a 1.5 percentage point subsidy on interest rates for equipment upgrade loans obtained from banks, the NDRC said it would also arrange funds from treasury bonds to further lower financing costs of firms.
The central bank has arranged a CNY400 billion low-cost relending facility to support equipment upgrades.
Song also said the document suggests that high-tech industrial sectors as well as transportation equipment manufacturing are likely to benefit, helping these sectors build on last year’s solid momentum.
