A new round of household appliance trade-in initiatives, with subsidies of up to 20 percent, has been launched to boost Chinese consumer spending.
The program specified eight kinds of appliances, including refrigerators, washing machines, air conditioners and TV sets, and local governments are also encouraged to expand subsidy overage.
"The subsidy scope allow more options for consumers, and better aligns with their consumption demands, which is conducive to increasing residents' experience with the subsidies and their sense of gain," said Chen Xi, assistant research fellow of the Academy of Macroeconomic Research of the National Development and Reform Commission (NDRC).
The rate of subsidization has significantly increased from previous trade-in initiatives, providing more benefits for buyers of eco-friendly products. For appliances at the highest energy and water efficiency level, or level one, the subsidy will cover 20 percent of the total cost, while for level two products, consumers may receive subsidy of 15 percent of the cost.
"Take the appliances with Level I energy and water efficiency, 20 percent of the sales price is covered by the government subsidies, meaning that the government pays one-fifth of the cost. That is in fact quite a big portion. Basically, the central government assumes 90 percent of the subsidy, and the local governments account for the rest 10 percent. For western regions, the central government assumes up to 95 percent of the subsidy. That is, for places where financing capacity is weaker, the central government shoulders larger subsidy responsibility," said Zou Yunhan, deputy head of the Macroeconomic Research Office of the NDRC State Information Center.
The program has apparently stimulated household appliance sales in multiple regions.
"Throughout the subsidy period, our sales expanded 62.42 percent year on year. Among the categories, sales of mobile phones grew 246.22 percent, and air conditioners, 48.56 percent, " said Li Qing, an employee of a household appliance company.
Consumers are also happy to take the opportunity.
"I am here for the trade-in to change a computer for my child. I learned that there is subsidy available this time, so I rushed over," said Ms. He, a local resident.
Ever since the first round of trade-in initiatives was launched in March, various promotional activities have been carried out across the country. The trade-in sales of TV sets, washing machines, and refrigerators on major e-commerce platforms rose by 92.9 percent, 82.8 percent, and 65.9 percent, respectively in July, according to the Ministry of Commerce.
Trade-in subsidies bolster sales of household appliances across China
