China's trade-in policy spurs increased consumption

China's consumer products trade-in policy will remain unchanged this year, and different regions' overall progress of using the subsidies is in line with expectations. The subsequent fund will be allocated in the third and fourth quarter successively, said the National Development and Reform Commission, the country's top economic planner.

The country has issued 300 billion yuan ($41.8 billion) in special treasury bonds to support equipment upgrades and trade-in deals for consumer goods. The trade-in program has expanded its scope this year, with the figure doubling from that of 2024, the NDRC said.

So far, two batches of central funds totaling 162 billion yuan have been allocated in January and April this year to support local governments in carrying out the trade-in program in the first and second quarters. Subsequently, 138 billion yuan of central funds will be distributed orderly in July and October for the third and fourth quarters, said the NDRC and the Ministry of Finance on Thursday.

According to the NDRC, the national subsidies for the trade-in program include three parts. First, it is the issuance of ultra-long special treasury bonds totaling 300 billion yuan from the central government. Besides, local governments will provide proportional matching funds in the ratio of 9:1 between the central and local governments, according to relevant regulations.

Thirdly, some regions will also arrange additional local funds based on local work progress and situations, in addition to the central government's allocations and local governments' proportional matching funds, the NDRC said.

The NDRC added that relevant departments would guide local governments to further optimize the distribution of subsidies, ensuring that the policy implementation will be more steady and orderly, and funds will be used in a balanced manner until the end of the year.

After launching the trade-in program last year, China has effectively boosted consumption growth and driven significant industrial transformation and upgrading. As of Wednesday this year, the trade-in policy has fueled relevant sales this year to exceed last year's total sales, said the Ministry of Commerce.

Next, local business regulatory departments will be required to make good use of the funds, refine the usage in different fields and time periods, and smoothly and orderly promote the trade-in deals, the commerce ministry said.