Trade-in policy boosts consumption in China

China has continued to expand the scope of its consumer products trade-in programs, and the policy has effectively boosted consumption and promoted sustained economic growth, the Ministry of Commerce said on Friday.

In the first quarter, the trade-in program of consumer products has driven the growth rate of total retail sales of consumer goods in the country by 1.6 percentage points. Over the period, total retail sales of consumer goods in China reached 12.47 trillion yuan ($1.7 trillion), up 4.6 percent year-on-year, showing a trend of steady growth, the ministry said.

"Since the implementation of the trade-in program, more than 120 million consumers have enjoyed the subsidies, and sales of related consumer products reached over 720 billion yuan," said Li Gang, director-general of the department of market operation and consumption promotion at the Ministry of Commerce, during a news conference in Beijing.

China has vowed to implement solid supportive measures to boost domestic consumption. The plan outlines the issuance of ultra-long special treasury bonds totaling 300 billion yuan to bolster consumer goods trade-in programs this year, doubling from that of 2024.

As of Thursday, a total of 2.71 million vehicles have been exchanged for new ones in China, and 47.47 million units of household appliances have been exchanged for new ones. The figure came in at 36.61 million units for digital products such as mobile phones, and 37.12 million units of home furnishing products for kitchens and bathrooms, and 4.2 million units for electric bicycles, data from the commerce ministry showed.

The program has promoted the upgrading of durable consumer goods toward greener and more intelligent products, the commerce ministry said.

In the Government Work Report delivered in March, boosting consumption was listed as a top priority among this year's tasks.

Denis Cheng, consumer sector leader of EY Greater China, said the country's consumer products tradein program has directly brought benefits to consumers, and enhanced consumer confidence and willingness to shop.

The trade-in program has continued to show its effects, and sales of key commodities such as automobiles, home appliances and home furnishings are improving.

In 2024, China's consumption market indicated a positive trend, laying a solid foundation for this year's growth.

"Fueled by the government's multiple favorable policies that aim to boost consumption, China's overall consumption market is forecast to show a stable and positive growth trend this year," Cheng said.

Compared with last year, subsidies for the trade-in program were launched earlier this year, with wider social participation in different regions across the country.

In East China's Jiangsu province, sales of bulk consumer products such as automobiles, home appliances, home decoration and home furnishings in the first quarter exceeded 58.4 billion yuan, ranking top in the country.

So far this year, the cumulative use of subsidies for the trade-in program in the province has topped 10 billion yuan, driving sales of related products by nearly 80 billion yuan, said the local government.

Meanwhile, in East China's Anhui province, the cumulative use of government subsidies for the trade-in program in the province reached 3.34 billion yuan so far this year, driving sales of approximately 27 billion yuan, local government data showed.