BEIJING | Dec 30 (GeokHub) China is committing nearly 63 billion yuan ($8.9 billion) from special long-term government bond funds to expand its nationwide consumer trade-in subsidy programme, as authorities move to stimulate domestic spending amid slowing economic momentum.
State media said the funding will support a scheme that encourages households to replace older consumer goods — including home appliances, vehicles and personal devices — by offering direct rebates at the point of purchase.
The programme, first introduced in 2024, has become a central pillar of Beijing’s strategy to boost internal demand as external trade pressures persist and growth shows signs of fatigue.
SMARTPHONES AND DIGITAL DEVICES ADDED
From 2026, China will extend the scheme to include digital and smart electronics, marking the first time smartphones, tablets, smartwatches and wristbands qualify for government rebates.
Under the new rules, consumers buying eligible smart devices will receive a 15% subsidy, capped at 500 yuan per item, according to a joint statement from the country’s top economic planner and finance ministry.
Major household appliances — including refrigerators, washing machines and televisions — will continue to qualify for rebates of up to 1,500 yuan per unit, covering six core appliance categories.
CAR AND GREEN VEHICLE INCENTIVES MAINTAINED
The programme also retains incentives aimed at accelerating the shift toward cleaner transport.
Consumers who scrap older vehicles and purchase new energy vehicles (NEVs) can receive subsidies worth 12% of the purchase price, capped at 20,000 yuan. Buyers replacing conventional cars with newer NEVs remain eligible for rebates of up to 15,000 yuan.
ECONOMIC PRESSURE DRIVES POLICY PUSH
China’s economy showed renewed strain late this year, with factory activity growing at its slowest pace in over a year and retail sales recording their weakest performance since the lifting of pandemic restrictions.
The slowdown has intensified pressure on policymakers to identify new sources of growth as the country heads into 2026.
Household consumption currently accounts for roughly 40% of China’s gross domestic product, far below levels seen in advanced economies such as the United States. Senior officials have pledged to significantly raise that share over the next five years, with some government advisers targeting a rise to around 45%.
EQUIPMENT UPGRADE PROGRAMME EXPANDED
Alongside consumer subsidies, Beijing will broaden a separate equipment-modernisation initiative. Previously focused on sectors such as manufacturing, energy, transport and healthcare, the programme will now include upgrades for elevators in ageing residential buildings, elderly-care facilities, and fire-and-rescue infrastructure.
Authorities say the combined measures are designed to stimulate spending, modernise infrastructure and reduce reliance on exports at a time of heightened global uncertainty.
