The Chinese government has been on its toes recently, seeking various ways to revive its economic growth, which has been slowing down. One of the key strategies employed by the government is to boost domestic demand by encouraging consumers to purchase new home appliances and digital goods. To achieve this, the government has expanded its consumer trade-in scheme to include a wide range of products, such as microwave ovens, water purifiers, dishwashing machines, and rice cookers.
First of all, what is the trade-in scheme?
The trade-in scheme allows consumers to trade in their old appliances for new ones, with the government providing subsidies to offset the cost. The subsidies are offered in the form of a 15% discount on eligible items, with a maximum discount of 6,000 yuan ($818) per item. This move is expected to stimulate consumption in the sluggish household sector, which has been a major contributor to China’s economic growth in the past.
The government has allocated 81 billion yuan ($11.05 billion) for consumer goods trade-ins in 2025, which is part of the broader efforts to support consumption. This allocation is in addition to the 150 billion yuan allocated from the 1 trillion yuan special treasury bond issuance in the previous year, which was used to subsidize the replacement of old appliances, cars, bicycles, and other goods.
So, what are the eligible products? The expanded trade-in scheme includes a wide range of products, such as:
- Microwave ovens
- Water purifiers
- Dish-washing machines
- Rice cookers
- Cellphones
- Tablet computers
- Smart watches
- Smart bracelets
All of these products must be priced below 6,000 yuan ($820) to be eligible for the subsidy.
While the trade-in scheme is expected to have a positive impact on the economy, there are also challenges ahead. The government will need to ensure that the scheme is implemented effectively, and that the subsidies are targeted at the right products and consumers. Additionally, the government will need to monitor the impact of the scheme on the environment, as the disposal of old appliances and the production of new ones can have negative environmental consequences.
The Chinese government’s efforts to revive economic growth through the expansion of the consumer trade-in scheme are a step in the right direction. By providing subsidies for a wide range of products, the government is encouraging consumers to purchase new home appliances and digital goods, which can help to stimulate consumption and support the growth of the manufacturing sector. However, the government will need to ensure that the scheme is implemented effectively and that the subsidies are targeted at the right products and consumers.
