To help China’s faltering economy, the government has enlarged its trade-in program and provides discounts of up to 20% on new products. Originally designed to promote specific product sales, the trade-in program now features a larger spectrum of home appliances to increase consumer expenditure.
What new items have been added to the trade-in list?
Originally including TVs, phones, tablets, and smartwatches, the trade-in program now covers a range of house products. For discounts on new purchases, consumers may now trade in older models of microwave ovens, dishwashers, rice cookers, and water purifiers. This development is a component of a larger campaign to boost consumption and assist sectors experiencing low demand.
“We want to reach a bigger portion of the consumer market, especially in everyday household products that are essential for daily life, by including home appliances in the trade-in scheme,” a government spokesman said.
In what way does the Scheme seek to stimulate consumer expenditure?
The second biggest economy in the world, China, is confronting several difficulties, including a severe property crisis and slow consumer demand. The Chinese government has aggressively sought policies to solve these problems and boost the home economy.
This year, the government has set aside 81 billion yuan (about £8.9bn, $11 billion) for the trade-in scheme to boost consumer expenditure. Officials claim the programs are already showing “visible effects.” Since the program’s start, sales of large-ticket goods, including home appliances and cars, have increased noticeably.
“While the trade-in scheme has been effective in promoting particular products like cars and appliances, its broader impact on general consumer spending remains uncertain,” said an economist. “The program has had mixed so far in terms of success.”
Has the program been successful?
Although the trade-in program has caused some industries to see a considerable rise in sales, economists are wondering whether it will be sufficient to raise consumer demand significantly. Although big products like electric cars and household appliances have experienced more sales, many consumers still hesitate to purchase because of continuous worries about the state of the economy and future possibilities.
An economist noted that while the trade-in program has increased sales of some products, it has not significantly affected consumer behaviour. “The challenge resides in altering the general expenditure patterns of the population, especially when many are unsure about the future of the economy.”
Beijing is implementing what other measures?
The trade-in program is among numerous recent policies China has undertaken to boost its economy. The more dubious the global economic climate gets, the more difficulties the Chinese government is experiencing. Particularly under external pressure, such as taxes on items made in China and geopolitical concerns, exporters find it difficult to export.
Emphasizing the need for “vigorous” efforts to increase consumer spending, China’s leadership underlined at a crucial conference in December the need for domestic consumption to drive economic development. This change in policy underscores the growing necessity to prioritize internal demand instead of depending on exports to keep pace.
Officials are also working for investment in infrastructure and innovation as part of the government’s larger stimulus initiatives, therefore supporting struggling sectors.
What effects on China's economy are American tariffs having?
Other domestic initiatives and the trade-in program exist in a difficult outside world. Recently, President-elect Donald Trump promised to levy a 60% tariff on Chinese-made goods, which would aggravate China’s economic problems, because he is returning to the White House this month.
With the government anticipating growth of roughly 5%, China is getting ready for the revelation of its 2024 economic growth estimates next week. Given the persistent structural problems in the nation’s economy, economists remain wary about its capacity to reach its goals.
It is unclear if the trade-in program and other initiatives would be enough to rebuild consumer confidence and propel long-term development as China keeps enacting different economic policies.
“The trade-in scheme has made some positive strides, but there is still much work to be done to revitalize the economy,” said one economist anonymously. “What’s clear is that China has to find ways to support consumers as well as companies in the months to come.”
