To rejuvenate its sluggish economy, China has expanded a government-backed trade-in program. This initiative allows consumers to exchange old items for up to 20% discounts on new products. The recent additions to the list include kitchen appliances such as microwave ovens, dishwashers, rice cookers, and water purifiers. Previously, the scheme covered products like smartphones, televisions, tablets, smartwatches, and electric vehicles.
The Chinese economy is facing several obstacles, including declining consumer demand and an ongoing property crisis. To address this, China’s top economic planning body allocated 81 billion yuan (about $11 billion) for the trade-in program this year.
Read More: ISRO: Remarkable Milestone As Cowpea Seeds Successfully Germinate In Space
Early results show positive outcomes. According to China’s Ministry of Commerce, sales of major items like home appliances and cars have seen a noticeable rise. These products, typically considered big-ticket items, have experienced increased sales under the trade-in initiative, signaling some success in driving consumer spending.
Despite the success in boosting specific sectors, many economists remain skeptical about the scheme’s long-term impact. Dan Wang, a China-based economist, argued that the measures are insufficient to significantly lift overall consumption. Harry Murphy Cruise, head of China economics at Moody’s Analytics, echoed this sentiment, stating that while the initiative has supported sales of certain goods, it hasn’t sparked a broader increase in consumer spending.
Read More: Russia’s Karelia Region Offers Rs 81,000 To Female Students For Delivering Healthy Babies
China’s challenges extend beyond domestic consumer demand. As the country grapples with slow economic growth, its exporters are facing mounting difficulties. Additionally, international tensions, such as the looming threat of a 60% tariff on Chinese-made goods by President-elect Donald Trump, have added pressure on the economy. In response, China has been exploring various strategies to bolster its domestic economy.
In December, China’s leadership held a key meeting, highlighting the need for vigorous measures to stimulate domestic consumption. While the trade-in program has produced tangible results in some areas, experts argue that more comprehensive efforts are needed to significantly uplift the economy.
As China prepares to announce its 2024 economic growth figures next week, the government is projecting a growth rate of around 5%. However, the long-term success of trade-in programs and other economic measures will depend on their ability to sustain consumer confidence and stimulate broader spending across various sectors.
