China counts on microwaves, rice cookers to revive economic growth

Beijing Reuters —

China has added more home appliances to the list of products that can be used in its consumer trade-in scheme and will offer subsidies for additional digital goods this year, in an effort to revive demand in the sluggish household sector.

Microwave ovens, water purifiers, dishwashers and rice cookers will be included in the trade-in scheme for home appliances this year, according to a document issued by the top state planner and the finance ministry on Wednesday. Cellphones, tablet computers, smart watches and bracelets under 6,000 yuan ($818) could get 15% subsidies.

The statement did not specify the total cost of the incentives, however, a finance ministry official said at a press conference on Wednesday that the government had so far allocated 81 billion yuan for consumer goods trade-ins to support consumption in 2025.

The new measures are part of a broader plan to spur growth in the world’s second-largest economy in 2025, where a severe property crisis has eroded consumer wealth and hurt household spending.

China’s struggling consumer sector has been a particular pain point for the economy with analysts and policy advisers calling for urgent measures to get households spending again.

“We expect the total subsidies to double in size to 300 billion yuan in 2025. This marks somewhat a policy pivot towards more consumption,” said Xu Tianchen, senior economist at the Economist Intelligence Unit.

However, more limited subsidies for phones and tablets, at less than 500 yuan per item, suggest Beijing does not intend to subsidize the rich for large-ticket spending, he added.

China last year apportioned about 150 billion yuan from the 1 trillion yuan special treasury bonds issuance to subsidize