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China's trade-in program stimulates consumer market vitality

Xinhua | Updated : 2024-05-08
A BYD Ocean-M electric car is displayed at the 2024 Auto China in Beijing on April 25, 2024. [Photo/VCG]

BEIJING - China's new round of consumer goods trade-ins has achieved positive initial results over the past few months, raising market confidence that successful revival of consumption will offer stronger impetus to the economy.

During the just-concluded May Day holiday break, sales of automobiles, home appliances and furniture monitored by the Ministry of Commerce (MOC) increased by 4.8 percent, 7.9 percent and 4.6 percent year-on-year, respectively.

From e-commerce platforms to brick-and-mortar stores, more buyers made deals thanks to subsidies and discounts under the program.

"Recently, trade-ins accounted for 40 to 50 percent of our orders every day," said Zhao Hongfu, manager of a store of home appliance retailer Suning in Shanghai. Wang Kui, working for online shopping platform Tmall, said the value of trade-in deals involving home appliances and smartphones has since late March 2024 surged by 90 percent compared with a year earlier.

China's State Council released an action plan in March to initiate large-scale equipment upgrades and trade-ins of consumer goods -- nearly 15 years since the last such round of renewals.

At the end of 2023, people in China owned some 336 million civilian automobiles and over 3 billion major household appliances, including refrigerators, washing machines, and air conditioners. It is estimated the upgrading drive will create market demand worth more than 1 trillion yuan ($140 billion).

Analysts have highlighted the significance of this new program in unleashing domestic demand potential and sustaining economic recovery.

Given complicated situations both at home and abroad, these consumer goods trade-ins will stimulate consumer sentiment and strengthen growth momentum, said Zhu Keli, a researcher at the China Institute of New Economy.

Fu Yifu, a research fellow with the Star Atlas Institute of Finance, believed that industrial upgrades will be boosted and this will also result in acceleration of China's green transformation.

In keeping with the high-level action plan, ministries have started to roll out specific measures to promote trade-ins, while local authorities have unveiled differentiated favorable policies.

The MOC and multiple other government departments published detailed plans to encourage people to take a part in the program, and financial regulators called on institutions to actively meet related financing demands.

East China's Jiangsu province predicted the market demand for consumer goods trade-ins will reach 70 billion yuan this year, while Central China's Hubei province expects to reach 40,000 automobile trade-ins in 2024. Henan province in Central China is aiming to increase recycling of scrapped cars and waste home appliances by 50 percent and 15 percent, respectively, in 2025, compared with 2023.

"As the program has been pushed forward in an effective and orderly manner, with the joint action of local governments and many enterprises, we believe greater results will be achieved in the future," said Zhao Chenxin, deputy head of the National Development and Reform Commission.