BEIJING : China has included more home appliances in its consumer trade-in program and plans to provide subsidies for extra digital goods this year, aiming to stimulate demand in the sluggish household sector. This year, the trade-in program for home appliances will feature microwave ovens, water purifiers, dishwashers, and rice cookers, based on a document released by the finance ministry and the leading state planner on Wednesday. Cell phones, tablet devices, smartwatches, and bands priced under 6,000 yuan may receive 15 per cent subsidies. The announcement did not mention the overall expense of the incentives, but a finance ministry representative remarked at a press conference on Wednesday that the government has thus far set aside 81 billion yuan ($11.05 billion) for consumer goods exchanges to boost consumption in 2025. The new initiatives are integral to a larger strategy to stimulate growth in the globe's second-largest economy by 2025, where a significant property crisis has diminished consumer wealth and negatively impacted household spending.
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China expands trade-in program for home appliances.
The weak consumer sector in China has been a significant issue for the economy, prompting analysts and policy advisors to demand immediate actions to stimulate household spending once more. "We anticipate that the overall subsidies will increase to 300 billion yuan by 2025." "This signifies a slight shift in policy towards increased consumption," stated Xu Tianchen, a senior economist at the Economist Intelligence Unit. Nonetheless, the restricted subsidies for phones and tablets, priced below 500 yuan each, indicate that Beijing does not plan to support affluent individuals for high-value purchases, he remarked. China last year apportioned about 150 billion yuan from the 1 trillion yuan special treasury bonds issuance to subsidise replacements of old appliances, cars, bicycles and other goods.Officials said that campaign "had achieved positive effects"
China Reports Growth in Automobile and Home Appliance Sales, Plans Further Stimulus for 2025
Li Gang, an official from the commerce ministry, stated at the same press conference that the campaign led to 920 billion yuan in automobile sales and 240 billion yuan in sales of home appliances in 2024. Nonetheless, investors discovered minimal delight in Wednesday's disclosures, as China's consumer electronics stock index had decreased by 3.2 per cent by the midday pause. A state planning official stated last week that China intends to significantly boost financing through ultra-long treasury bonds in 2025 to stimulate equipment upgrades and trade-in programs for consumer goods. In the previous year, China allocated a total of 300 billion yuan for these projects. Zhao Chenxin, the deputy head of the National Development and Reform Commission (NDRC) - the government planner - stated on Wednesday that funding details for the programs would be announced at the annual parliamentary session in March.
Senior Chinese officials have pledged to "energetically" enhance consumption and broaden domestic demand "in every aspect" this year. Reuters indicated last week that millions of government employees throughout China received pay raises as part of initiatives to enhance consumption. "We anticipate that increased supportive policies and a stronger base effect will assist in the rebound of retail sales growth in 2025 relative to 2024," stated Lynn Song, chief economist for Greater China at ING. "Recovery in household consumption will rely on stabilizing asset prices and enhanced confidence in job prospects."
China Expands Support for Equipment Upgrades in Key Sectors to Boost Economic Growth
As stated in the policy document, China will also boost funds from the issuance of ultra-long special treasury bonds to aid equipment upgrades in crucial sectors. Devices utilized in the technology and agricultural industries will now be part of the campaign, concentrating on advanced, intelligent, and eco-friendly equipment. The NDRC stated that, based on a 1.5 percentage point interest rate subsidy for equipment upgrade loans secured from banks, it would also allocate funds from treasury bonds to further reduce corporate financing costs. The central bank has established a 400 billion yuan low-interest relending program to aid in equipment improvements. Song also mentioned that the document indicates that high-tech industrial sectors and transportation equipment manufacturing are expected to gain, allowing these sectors to capitalize on the strong momentum from last year.
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