A vast array of durable goods, from kitchen stoves to smart toilets, were on display inside a Suning chain store in Nanning, South China’s Guangxi Zhuang Autonomous Region, with vibrant stickers promising up to 20% off thanks to state subsidies. These discounts are part of China’s ambitious 300-billion-yuan ($41.7 billion) program aimed at encouraging equipment upgrades and consumer goods trade-ins.
Funded by ultra-long treasury bonds, the program is an expanded version of an initiative launched in March. The impact of these pro-consumption measures has been significant, with a surge of shoppers flooding physical stores across the country.
Huang Bentao, a manager at a Suning store, reported a dramatic increase in customer inquiries after the local subsidy program was implemented. “We saw a ten-fold jump in inquiries as eager buyers learned about the upcoming rebates,” Huang said. The program covers a wide range of products, offering discounts on almost every model under the subsidized categories, making it a compelling offer for consumers.
One of the notable beneficiaries of the scheme is Lu Yuan, a 33-year-old newlywed from Guangxi, who, after months of waiting, purchased a comprehensive household electronics package with substantial savings. “We saved about 25,000 yuan off the total price for a suite of electronics for our new place,” Lu shared, having compared prices across both online and offline retailers.
By October 30, local authorities in Guangxi had partnered with over 2,500 enterprises, distributing about 1.53 billion yuan in subsidies, resulting in a surge of 11.14 billion yuan in transactions. The new approach has expanded eligibility and increased subsidies for a wider range of goods, further benefiting consumers.
In addition to home appliances, the auto trade-in program has seen significant uptake. Liu Jie, a sales manager from Guilin, recently purchased a new energy vehicle for 20,000 yuan less than the retail price. Initially, Liu had been disqualified from receiving subsidies due to his old car’s failure to meet emission standards. However, after eligibility restrictions were eased, he was able to benefit from a doubled subsidy amount.
Experts, including Yao Hua from the Guangxi Academy of Social Sciences, emphasize that tax cuts and subsidies are effective tools to stimulate consumer spending. “The results have been promising, injecting vitality into the retail sector and boosting consumer confidence,” Yao noted.
China’s retail sales grew by 4.8% year-on-year in October, a notable pickup from the 3.2% growth in September. Additionally, the vehicle-renewal program has driven over 4 million trade-in applications, contributing to a 7% year-on-year increase in auto sales in October.
With ongoing subsidies and trade-in programs, China’s consumer market is experiencing a renewed boost, highlighting the effectiveness of government support in driving economic recovery and encouraging spending.