On the back of rising consumer enthusiasm, the Chinese mainland has just doubled its financial commitment to the national trade-in program, pledging 300 billion yuan in treasury bonds to sustain subsidy payments through 2025. By channelling bonds into local coffers, the central government aims to spur replacements from appliances to electric vehicles.
This year's first two tranches – 162 billion yuan – were released in January and April, covering half of the annual budget. A second wave of allocations is slated for July and October, ensuring steady support across all four quarters.
Local authorities must match central funding on a 9:1 ratio, with flexibility to top up based on regional needs. "Currently, about half of the annual subsidy budget has been utilized, a pace well within expectations," says an official with the National Development and Reform Commission (NDRC).
Data from the Ministry of Commerce shows trade-in-driven sales have already outpaced all of 2024, with five key categories hitting 1.1 trillion yuan and roughly 175 million subsidy payments issued by May 31. The National Bureau of Statistics reports that household appliance and audiovisual sales jumped 53 percent year on year in May, while communication device sales rose 33 percent.
"The initiative has played a significant role in boosting consumer spending," notes Liang Feng, associate professor at Nankai University. Retailers echo the sentiment: Wu Zhirong, manager of an Oppo store in Beijing, says, "Trade-in contributes over half of our daily sales. Subsidy-eligible new products are a big draw for customers."
Innovation and sustainability are also in the spotlight. Beijing expanded subsidies to cover smart and elderly-friendly home appliances – everything from smart toilets to robotic vacuum cleaners – offering up to 15 percent off the sale price, capped at 2,000 yuan. Shandong simplified the car trade-in application, while Shanghai merged national and municipal subsidies with corporate discounts online and offline. Provinces including Yunnan, Shaanxi and Sichuan have rolled out tailored measures of their own.
"Local practices show the program not only drives immediate sales but also promotes product upgrades and industrial transformation," says Yao Dongmin of the Central University of Finance and Economics. Peking University's Wang Hao adds, "By rewarding green, energy-efficient purchases, the policy encourages manufacturers to accelerate innovation toward sustainable technologies."
Looking ahead, analysts believe the program could expand into new categories – think sporting goods – to meet diverse demands and ignite broader market growth. As Huang Zhengxue, researcher at an NDRC-affiliated think tank, suggests, "Integrating trade-in with other demand-side measures can create a synergistic policy mix that unlocks deeper consumer potential and underpins sustainable economic development."
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China pledges continued funding for consumer goods trade-in subsidies
cgtn.com
