As Chinese e-commerce platforms prepare for one of the country’s major shopping events of the year, several local authorities have unexpectedly halted subsidies provided under a nationwide trade-in program for specific items. This move has disrupted earlier assumptions that these incentives would be available throughout the entire year.
By Thursday, residents in Guangzhou, the main city of the economically powerful province of Guangdong in South China, discovered that they were unable to obtain coupons for home improvement items like doors, ceramics tiles, and couches, which had formerly provided rebates of up to 20,000 yuan (approximately US$2,785) per individual.
The municipality has also stopped providing grants for household appliances and electronic devices.
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On Sunday, Jiangsu province suspended online shopping coupons but kept offering restricted daily coupons for in-store transactions. Meanwhile, Hubei province along with various municipalities in Guangdong such as Shenzhen, Dongguan, and Zhongshan ceased subsidies for smart household electronics, as stated in an announcement posted on the e-commerce site JD.com—one of the platforms through which customers could claim these benefits.
This is the second year Of China's trade-in initiative, designed to stimulate consumption and address excess capacity across various industries. Originally focused on product exchanges, the program has grown to utilize hundreds of billions derived from sales. ultra-long-term special government bonds To provide discounts ranging from 15% to 20% on certain items.
At the close of last year, most municipal government grants extended through December. However, this year’s sudden stop halfway through—prior to the annual 618 shopping event where online retailers aim to sustain their sales growth—came as an unexpected move for many individuals.
The shopping-centric celebration marks JD.com’s birthdate from June 18, 1998. Each year before this event, the country’s online marketplace buzzes with deals and promotional offers on popular items.
As stated in the announcement on JD.com, many areas mentioned "program updates" as the cause for halting subsidies, though they did not offer additional information.
In the meantime, Chongqing, a major city in southwest China, announced on the online payments system UnionPay that the initial allocation of funds for specific products had run out.
On Tuesday, Chongqing stopped providing subsidies for household items like TVs and air conditioners, following the restriction of vouchers for these goods back in May.
Following numerous customer complaints, the Chongqing Municipal Commerce Bureau stated they were preparing a secondary phase of subsidies, with more information set to be released later this month.
A few weeks ago, a local administration in Gansu Province issued a comparable statement, suspending subsidy initiatives for trade-ins as the financial resources had been exhausted.
The Chinese central government has allocated 300 billion yuan from ultra-long-term special treasury bonds for this year’s trade-in program, which is twice the amount of 150 billion yuan initially planned at the beginning of the previous year.
Experts consider the trade-in program a successful strategy initiated by the Chinese government to boost consumer spending; however, others caution that this approach may be losing effectiveness due to waning short-term demand coupled with slow growth in household incomes.
The increase in subsidies for additional product categories this year has somewhat bolstered the number of subsidy applications, according to Ernan Cui, a China consumer analyst at Gavekal Dragonomics. However, she noted that demand may still be declining due to financial limitations.
The primary cause of the slowdown is undoubtedly demand, according to Cui. Household consumption growth primarily depends on income growth, but this hasn’t improved because of the weak labor market.
This indicates that there is only a limited amount of consumer demand for the program to attract ahead of schedule.
Cui forecasted that policymakers would probably amplify the program in the latter part of 2025 to boost economic expansion—particularly since retail sales might begin showing year-over-year declines in subsequent months because of a tougher comparison with figures from the previous year.
When Emma Song, who works in public relations in Shenzhen, learned that certain areas had ceased providing subsidies for electronics, she promptly looked into the newest policies in place in Shenzhen. She expressed relief upon discovering that an e-reader she was interested in purchasing would remain eligible for discounts since it wasn’t classified as a smart device under the new regulations implemented in Shenzhen.
If Shenzhen’s subsidy for that e-reader ceases as well, I wouldn’t purchase it at this time," stated the 26-year-old. "I would rather wait for the subsequent release.
I would feel cheated if I didn’t get the subsidy.
Last year, Song bought a new phone shortly before the subsidies were extended to cover electronic devices like hers. She mentioned that not being able to save money due to this change was disappointing.
By the end of May, China’s trade-in program had accumulated approximately 1.1 trillion yuan in sales for the year, as reported by the Ministry of Commerce. Consequently, national retail sales increased by 4.7 percent year-over-year during the initial four-month period.
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