Reviving Economic Growth Through Consumer Trade-Ins

In an ambitious move to stimulate economic growth, China has announced an $11 billion consumer trade-in scheme for 2025. This initiative includes a wide range of home appliances such as microwave ovens, water purifiers, dish-washing machines, and rice cookers. Additionally, electronic devices like cellphones, tablet computers, smart watches, and bracelets priced under CNY6,000 (US$818) are eligible for a 15% subsidy.

Substantial Government Support for Consumer Spending

The Chinese government has allocated CNY81 billion ($11.05 billion) to support this consumer goods trade-in program, aiming to invigorate household spending amidst a challenging economic landscape. This strategy is part of a broader effort to counteract the effects of a severe property crisis that has significantly impacted consumer wealth and spending habits.

Focus on High-End, Smart, and Green Equipment

Further emphasizing the importance of technological advancement and sustainability, the policy document highlights the inclusion of high-end, smart, and green equipment in the campaign. Equipment upgrades in key sectors such as information technology and agriculture will receive increased funding from ultra-long special treasury bonds, with additional measures to lower financing costs for businesses.

Anticipated Impact on Retail Sales and Economic Recovery

Experts predict that these measures, coupled with a supportive base effect, will lead to a rebound in retail sales growth in 2025. The recovery of household consumption is seen as crucial for economic stabilization, with asset price stabilization and improved employment confidence being key factors.