China Expands Consumer Subsidies for Home Appliances to Revitalize Weak Domestic Demand

Forex - China has expanded the scope of consumer trade-ins for home appliances as part of its efforts to stimulate sluggish domestic demand and will provide more subsidies for digital purchases this year. According to a document released by a senior state planner and the Ministry of Finance, microwaves, water purifiers, dishwashers, and rice cookers will be included in the home appliance trade-in program this year. Mobile phones, tablets, smartwatches, and bracelets costing less than 6,000 yuan will be eligible for a 15% subsidy.

The total cost of the incentives was not specified in the announcement, but a Ministry of Finance official stated at a press conference on Wednesday that the central government has earmarked 81 billion yuan (11.05 billion USD) for trade-ins of consumer goods to support consumption by 2025. Last year, China allocated approximately 150 billion yuan from a 1 trillion yuan special government bond issuance to subsidize the exchange of old household appliances, cars, bicycles, and other goods.

Li Gang, a commerce ministry official, mentioned at the same press conference that this campaign resulted in 920 billion yuan in automobile sales and 240 billion yuan in home appliance sales in 2024. The new measures are part of a broader plan to stimulate growth in the world’s second-largest economy in 2025, as a severe property crisis has eroded consumer wealth and harmed household spending. Senior Chinese leaders have pledged to "strongly" boost consumption and expand domestic demand "in all directions" this year.