China spends $11.05 billion to push consumer trade-ins for economic growth

China is expanding its consumer trade-in scheme for home appliances in a bid to revitalize its struggling economy. This expansion, part of a broader strategy to stimulate domestic demand, was highlighted in a recent policy document released by the country’s top state planner and finance ministry. The government has included items such as microwave ovens, water purifiers, dish-washing machines, and rice cookers into the trade-in scheme, but specific details regarding the total cost of the incentives were not mentioned. However, officials indicated that a total of $11.05 billion has been earmarked to support consumer goods trade-ins through 2025. In the previous year, China allocated approximately $20.5 billion from its special treasury bonds issuance of $136 billion towards subsidizing the replacement of older household goods, including appliances, vehicles, and bicycles. Officials announced that this initiative led to significant economic activity, generating $125 billion in auto sales and $33 billion in home appliance sales throughout 2024. The positive outcomes from the previous campaign encouraged top Chinese leaders to promise a vigorous push to enhance consumption and expand domestic demand across multiple sectors. China's efforts to boost consumption occur amid a profound property crisis that has diminished consumer wealth and adversely impacted household spending. As citizens grapple with declining financial security, the government’s initiatives aim to restore consumer confidence by stimulating demand in essential sectors. This approach underlines the commitment of Chinese officials to address economic challenges head-on, ensuring that the domestic economy strengthens in the face of adversity. As the world’s second-largest economy, any measures taken by China to enhance domestic consumption are closely monitored and can have global consequences. Analysts view this consumer trade-in initiative as a crucial step towards recovering from economic setbacks and promoting sustainable growth moving forward. As such, officials maintain a proactive stance to address the various factors causing sluggish demand and are committed to devising comprehensive strategies to encourage spending during turbulent economic times.