How China is doubling down on trade-ins to boost sluggish consumption

China pledged on Sunday to «vigorously boost consumption» and «expand domestic demand in all directions» as they seek to cushion the impact of weak external demand amid an escalating global trade war.

While they did not release detailed plans and budgets for most of the measures, one exception was a consumer trade-in scheme — a Chinese version of a «cash for clunkers» programme, with officials announcing a considerable expansion of subsidies and the categories of products covered.

WHAT PRODUCTS ARE COVERED BY TRADE-INS?
Initially, China's government announced subsidies for eight household products — refrigerators, washing machines, televisions, air conditioners, computers, water heaters, domestic stoves and hoods for range cookers.

Purchasers of these products are eligible for subsidies equivalent to 15%-20% of their sales price, capped at 2,000 yuan ($276) for each item.

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Microwave ovens, water purifiers, dishwashers and rice cookers were added to the home appliance trade-in scheme this year, according to a document issued by China's top state planner and the finance ministry in January.

Cellphones, tablet computers, smart watches and bracelets under 6,000 yuan could also get 15% subsidies.

Cars are also eligible for the scheme, with subsidies for EVs and plug-in hybrids doubling to 20,000 yuan since first being announced in 2024, and conventional fuel vehicles also eligible for subsidies of up to 15,000 yuan.

HOW DOES IT WORK?
Last March, China's cabinet issued its initial plan to support large-scale equipment upgrades and consumer goods trade-ins, in a bid to boost investment and consumption amid a shaky economic recovery.

In 2024, 150 billion yuan in ultra-long treasury bonds were allocated to