China Expands Consumer Goods Trade-In Scheme

BEIJING (Reuters) – China has expanded the scope of a consumer goods trade-in scheme and will give more subsidies for digital purchases this year, in an effort to revive sluggish domestic demand, according to an official policy document released on Wednesday.

The measures follow a series of fiscal and monetary policy announcements made since September aimed at consolidating economic growth around 5% in 2024 and 2025, while softening the impact of an expected increase in U.S. trade tariffs.

Recent Policies

• January 2025 – Millions of government workers across China receive surprise wage increases, providing an immediate economic boost of approximately $12 billion to $20 billion.
• Dec. 24 – Authorities agree to issue 3 trillion yuan ($409.19 billion) worth of special treasury bonds for 2025, the highest annual amount recorded.
• Dec. 17 – Beijing targets a budget deficit of 4% of GDP for the upcoming year while maintaining a growth target around 5%.
• Dec. 12 – China’s top leaders pledge to increase the budget deficit, issue more debt, and loosen monetary policy for stable economic growth, according to the Central Economic Work Conference summary.
• Dec. 11 – Reports indicate leaders are considering allowing the yuan to weaken in 2025 in anticipation of higher U.S. trade tariffs.
• Dec. 9 – China shifts to an “appropriately loose” monetary policy stance, the first change in about 14 years, per a top Communist Party officials’ meeting readout.
• Nov. 13 – Tax incentives are announced on home and land transactions to support the struggling property market.
• Nov. 8 – A 10 trillion yuan ($1.36 trillion) debt package is unveiled to ease local government financing strains.
• Oct. 21 – China cuts its benchmark lending rates by 25 basis points.
• Oct. 17 – The housing authority expands the “white list” of unfinished projects eligible for funding and plans to increase bank lending to 4 trillion yuan by year-end.
• Oct. 12 – The finance ministry commits to significantly increase debt, support struggling local governments, and provide subsidies to low-income people.
• Sept. 29 – Guangzhou becomes the first top-tier city to lift all restrictions on home purchases; restrictions in Beijing, Shanghai, and Shenzhen are also relaxed.
• Sept. 27 – The central bank lowers reserve requirement ratios by 50 basis points and cuts the benchmark seven-day reverse repurchase agreement rate by 20 basis points.
• Sept. 26 – Leaders pledge to deploy necessary fiscal spending to spur growth, according to a Politburo meeting on the economic situation.
• Sept. 24 – The central bank announces aggressive monetary stimulus measures, including broad interest rate cuts and support for capital markets, following the COVID-19 pandemic.

Exchange Rate: ($1 = 7.3316 Chinese yuan)