Is China’s massive trade-in programme running out of steam?

The subsidy scheme has been key to lifting China’s consumer spending this year. But it is expensive – and may be creating new problems

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China’s massive trade-in programme for cars, home appliances and other big-ticket items has helped boost consumer spending this year, but doubts are growing about the sustainability of the policy. Photo: Xinhua

Published: 9:00am, 27 Jun 2025Updated: 2:33pm, 27 Jun 2025

For months, consumers across China buying everything from iPhones to cars and washing machines have enjoyed steep discounts – courtesy of the government.

This vast subsidy programme has played a key role in boosting China’s consumer spending this year, helping the economy remain relatively robust even amid an unprecedented trade war with the United States.

But in June, some of those offers suddenly disappeared. In the eastern Jiangsu province, local authorities stopped issuing vouchers for online purchases of home appliances. Around the same time, several other provinces suspended their trade-in programmes for cars and appliances, citing depleted funds.

The cancellations were the first sign that a reckoning may be approaching over China’s consumption-boosting policies, which have succeeded in their main goals – but come with a hefty price tag.

Last week, Beijing reaffirmed its support for the national trade-in scheme for durable goods, pledging that the rest of the 300 billion yuan (US$41.8 billion) funding would be allocated to local governments before the end of the year, with the next two rounds of funding set to be issued in July and October.

On Thursday, Li Chao, deputy director of the National Development and Reform Commission’s Policy Research Office, said the government would formulate monthly and weekly plans to monitor the utilisation of those funds. “This will ensure the orderly implementation of the consumer goods trade-in policy throughout the year,” she added.

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Is China’s massive trade-in programme running out of steam?

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}The subsidy scheme has been key to lifting China’s consumer spending this year. But it is expensive – and may be creating new problems

The subsidy scheme has been key to lifting China’s consumer spending this year. But it is expensive – and may be creating new problems