Update: China pledges continued funding for consumer goods trade-in subsidies

BEIJING, June 20 (Xinhua) -- China has reaffirmed its support for the national consumer goods trade-in program, ensuring continued funding to sustain the government subsidy payment throughout 2025.

The program, a key part of the country's broader strategy to stimulate domestic consumption, encourages consumers to replace outdated products -- such as home appliances and vehicles -- with newer, more efficient models.

The central government has earmarked 300 billion yuan (41.84 billion U.S. dollars) in treasury bonds to support local authorities in implementing the program in 2025, doubling that of last year. Two tranches of the central funding, totaling 162 billion yuan, were issued in January and April to support first-half implementation, with further allocations planned for July and October to cover the third and fourth quarters of the year.

"Currently, about half of the annual subsidy budget has been utilized, a pace well within expectations," said an official with the National Development and Reform Commission (NDRC).

According to the NDRC, local governments are required to provide matching funds based on a 9:1 central-to-local funding ratio, and may allocate supplementary funds depending on regional progress and specific needs.

Thanks to the program, consumer enthusiasm has risen this year, with a surge in sales of a wide range of products from smartphones to household appliances and electric bicycles.

"The initiative has played a significant role in boosting consumer spending," said Liang Feng, an associate professor at Nankai University.

An official of the Ministry of Commerce (MOC) said that sales driven by the trade-in policy this year have surpassed the total recorded in the whole year of 2024.

As of May 31, the program has boosted sales of five key categories of consumer goods totaling 1.1 trillion yuan this year, with about 175 million subsidy payments issued directly to consumers, the MOC said. Recent data from the National Bureau of Statistics showed sales of household appliances and audiovisual equipment in May surged 53 percent from a year ago, with sales of communication devices up by 33 percent.

According to Wu Zhirong, manager of a smartphone brand Oppo store in Beijing, the program has had a clear impact. "The trade-in policy contributes over half of our daily sales. Many of our new products qualify for subsidies, which greatly appeals to customers," Wu said.

Looking ahead, China will direct local authorities to make full use of the allocated funds and ensure the program is carried out in a steady and orderly manner, the MOC official said.

Recently, the Beijing municipal commerce authority announced an expansion of its subsidy coverage, targeting smart and elderly-friendly home appliances. Under the revised policy, local consumers who purchase smart toilets, robotic vacuum cleaners, smart locks, or waste disposers are eligible for a subsidy covering up to 15 percent of the final sale price, capped at 2,000 yuan.

Moreover, Shandong has simplified the application process for car trade-in subsidies, while Shanghai has combined national and municipal subsidies and corporate discounts through both online and offline channels. Regions such as Yunnan, Shaanxi, and Sichuan have also enhanced their related measures.

"Local practices show the program not only drives immediate sales but also promotes product upgrades and industrial transformation," said Yao Dongmin, professor of Central University of Finance and Economics, noting that with continued institutional improvements and increased funding, the policy is set to deliver wider benefits and reach more consumers.

While the program currently focuses on automobiles, home appliances, and digital devices, experts believe it can be expanded to include items such as sporting goods to better meet diverse consumer demands and stimulate growth in wider industries.

Besides, the program also encourages consumers to choose green, energy-efficient products by offering higher subsidies, which helps foster sustainable consumption. Wang Hao, professor of Peking University, expects Chinese manufacturers will be incentivized to make more innovations and transition toward greener technologies.

According to Huang Zhengxue, a researcher at a think tank affiliated with the NDRC, the trade-in initiative could be integrated with other demand-side measures to create a synergistic policy mix.

"As long as we focus on the most promising areas of consumption and ensure the effective implementation of trade-in policies, we can further unlock consumer potential and support China's long-term economic development," he said. ■