China’s economy continues to be stagnant. Recently, the Ministry of Commerce’s Department of Circulation Development issued a new subsidy program called “Trade in the Old for the New” to stimulate consumer spending and prevent further economic decline. However, the move has sparked public backlash, with many expressing reluctance to fall for it.
On August 25th, the Ministry of Commerce’s Department of Circulation Development issued a notice titled “Notice of Offices of the Ministry of Commerce and Four Other Departments on Further Improving the Trade-in-Old-for-New of Home Appliances.” The notice stated that individual consumers purchasing eight categories of home appliances like refrigerators, washing machines, televisions, air conditioners, computers, water heaters, stoves, and range hoods would be eligible for subsidies when trading in their old appliances for new ones.
According to the notice, subsidies for second-tier energy products amount to 15% of the product’s selling price, while top-tier energy-efficient products receive a 20% subsidy. Each consumer can receive subsidies for one product per category, with each subsidy not exceeding 2000 yuan.
The notice also encourages local authorities to subsidize other types of home appliances based on local consumer habits, market conditions, and industrial characteristics. Additionally, it requires platform enterprises to actively participate in the trade-in-old-for-new program for home appliances in various regions, setting up dedicated subsidy sections to enhance policy implementation.
In an interview with “Henan Livelihood Channel Big Reference” on the 26th, a merchant used an example to explain the subsidy: “For a product priced at 18,999 yuan, our subsidy is 999 yuan. According to national regulations, a 20% subsidy for top-tier products would amount to 3600 yuan, but since the maximum subsidy per item is 2000 yuan, we can only provide a subsidy of 2000 yuan, making the final cost 16,000 yuan.”
Following the issuance of the notice, netizens expressed their discontent. Many stated they were not willing to be deceived again, criticizing the program’s terms and conditions.
Statements from netizens included: “The routine is too deep; no one believes it,” “I don’t want even if it’s given for free,” “Stop nauseating people,” “If you are hungry, you should know it yourself, no need for your reminders,” “Trading in the old for the new is just making money twice,” “When they set the price, they’ve already factored in the subsidy,” “It’s just word games; prices go up with subsidies, and in the end, subsidies rarely benefit the common people,” “You pay the real money, while everything else is a mirage,” “Last time with the rural home appliances, we were deceived once, not falling for it again,” “It was the same ten years ago; the items bought back then were more expensive than now,” “Is it back to exporting by repackaging for domestic sales?” “They are really trying to squeeze every penny out of this opportunity.”
Regarding the nationwide push for a new round of the “Trade in the Old for the New” program by the Chinese Communist Party, financial and economic expert Bao Dequan previously analyzed that the main reason for the government’s introduction of this policy was the insufficient domestic demand.
He explained how the growth rate of many industries has slowed down in recent years, especially in manufacturing enterprises where overtime work is no longer necessary. Additionally, many companies have surplus equipment and products sitting in warehouses unable to be sold, resulting in high inventory levels. With fewer workers needed, employers are reluctant to expand production further and even consider downsizing. For those who remain employed, their wages have decreased. When workers can’t earn money, they are less inclined to spend, further exacerbating the economic situation.