Title: Revitalizing China's Economy with Microwaves and Rice Cookers
In 2025, the Chinese government plans to include microwave ovens, water purifiers, dishwashers, and rice cookers in a trade-in scheme for home appliances, as stated in a recent document issued by the top state planner and finance ministry. This move is part of a broader plan to stimulate growth in the world's second-largest economy, which has been affected by a severe property crisis that's impacted consumer wealth and spending.
Cellphones, tablet computers, smart watches, and bracelets under 6,000 yuan might qualify for 15% subsidies. A finance ministry official acknowledged at a press conference that the government had allocated 81 billion yuan for consumer goods trade-ins. This figure is intended to boost consumption in 2025.
The enrichment data reveals that the Chinese government has allocated a total of $11.05 billion for consumer goods trade-ins to support consumption in 2025. Local authorities will receive an additional 81 billion yuan from the central government to support this program in 2025. However, the exact total budget is not specified in the sources provided.
The new measures are expected to provide substantial support to the struggling consumer sector, which has been a major concern for economists and policy advisers. The campaign might result in significant increases in auto sales and home appliances sales.
This move marks a policy pivot towards more consumption, according to senior economist Xu Tianchen from the Economist Intelligence Unit. However, the subsidies for phones and tablets are limited, suggesting Beijing does not intend to subsidize the rich for large-ticket spending.
Last year, the Chinese government apportioned around 150 billion yuan from the 1 trillion yuan special treasury bonds issuance to subsidize replacements of old appliances, cars, bicycles, and other goods. Officials applauded the campaign's positive effects on auto sales and home appliances sales.
Top Chinese leaders have pledged to "vigorously" boost consumption and expand domestic demand "in all directions" in 2025. Millions of government workers have reportedly received wage increases to support consumption efforts. The central bank has also arranged a 400 billion yuan low-cost relending facility to support equipment upgrades.
The policy document also mentions that funds will be increased from the ultra-long special treasury bond issuance to support equipment upgrades in key areas like information technology and agriculture. High-end, smart, and green equipment in these sectors will be included in the campaign. The document further suggests that high-tech industrial sectors and transportation equipment manufacturing are likely to benefit from this initiative.
Businesses in the home appliance industry might see an increase in sales due to the trade-in scheme. To further stimulate consumer spending, the government could consider expanding the scheme to include business-related equipment, such as computers, printers, and office machinery.
