China allocates initial US$8.9 billion for consumer goods trade-in scheme in 2026

CHINA is allocating 62.5 billion yuan (S$11.5 billion) from ultra-long special treasury bond funds initially this year for its scheme that offers consumers subsidies to replace domestic appliances, state news agency Xinhua reported on Tuesday (Dec 30).

Beijing launched the scheme in 2024, providing financial support when consumers replace old appliances, bicycles and even cars, in a bid to shore up domestic demand amid persistent economic and trade pressures at home and abroad.

In 2026, digital and smart products will be included in the scheme, with smartphones, tablets, smartwatches and smart wristbands qualifying for a 15 per cent rebate, capped at 500 yuan each, China’s state planner and finance ministry said in a separate statement.

The Xinhua report did not specify the total size of the fund for the 2026 scheme. China set aside 300 billion yuan in special treasury bonds this year, released in batches throughout the year.

Under the scheme, consumers purchasing any of six categories of major home appliances, including refrigerators, washing machines, TVs, are eligible for a 15 per cent subsidy, of up to 1,500 yuan per item.

Buyers scrapping old cars receive subsidies equal to 12 per cent of the purchase price of new energy vehicles, capped at 20,000 yuan, while those replacing older vehicles with new NEVs get 8 per cent, up to 15,000 yuan.

China’s economy stalled in November, with the slowest growth in factory output in 15 months and the weakest retail sales since the end of zero-Covid curbs, underscoring the urgent need for new growth drivers heading into 2026.

Chinese leaders have pledged to “significantly” increase the share of household consumption in the economy over the next five years. Household consumption accounts for about 40 per cent of gross domestic product, far below nearly 70 per cent in the United States.

Some government advisers say Beijing should expand policy support for services consumption and aim to lift the consumption rate to about 45 per cent over the next five years.

SEE ALSO

Renminbi climbs past 7 per US dollar onshore for first time since 2023

PBOC’s leanest year for easing since 2021 defies Wall Street

China will also expand a separate equipment-upgrade programme beyond existing sectors such as industry, energy, power, transport, logistics and healthcare to include elevators in old residential blocks, elderly-care facilities and fire-and-rescue systems, according to the state planner and finance ministry’s statement.