China’s economy is facing difficulties, with local finances tight and policies constantly changing. The authorities in Beijing have repeatedly issued notifications in the past, urging all levels of government to “tighten belts and live frugally”. Subsequently, the official introduced the policy of “trading in old for new” for consumer goods to stimulate spending and drive economic development. Some mainland Chinese people have commented that the series of policies implemented by the Chinese Communist Party are aimed at encouraging people to make purchases, essentially forcing citizens to spend money. However, with many people lacking disposable income, they question what they can spend on.
According to a report by People’s Daily on June 8, the funds for the “trading in old for new” initiative come from central and local finances. This year, the central government has allocated 300 billion yuan of long-term special national bonds to support the program, which is a doubling increase from the previous year.
Since the beginning of the year, various fiscal departments have issued two batches of these long-term special national bonds totaling 162 billion yuan to local governments.
However, as the e-commerce platforms gear up for the upcoming “6.18” shopping festival, news has emerged from various regions about suspensions or adjustments to subsidies for trading in old electronics for new ones.
A report by The Paper on June 5 indicated that the trading in old for new program for electronics was suspended in Chongqing because the existing subsidy funds had been depleted, totaling nearly 1.2 billion yuan.
On June 6, the qualification page for the “national subsidy” program on JD.com in Jiangsu displayed messages stating that users can no longer receive subsidies for household appliances and mobile digital products, with the notice of “activity upgrading in progress, subsidy benefits temporarily unavailable. Further information on reopening will be announced later”. Taobao’s “national subsidy” section also mentioned that the program was being upgraded in Jiangsu, and during this period, consumers would not be able to receive or utilize subsidy benefits.
Starting from June 1, some platforms in Jiangsu have been making adjustments or system upgrades with regard to the trading in old for new program. The “national subsidy” in Jiangsu, both online and offline, will be subject to quota management until the end of the year.
The suspension of the electronic trade-in program is not an isolated incident. An announcement by the Apple flagship store on JD.com stated that the national subsidy program was being upgraded in regions such as Guangdong (only accessible in Jiangmen and Zhongshan), Hubei, Shenyang, Chongqing, making it temporarily unavailable to redeem, unlock, or use subsidies.
Mr. Lu from Sichuan told Epoch Times, “The CCP’s policies are constantly changing. Previously, they promoted the ‘appliances to the countryside’ program, offering subsidies for purchasing appliances or discounts. Later, they tightened budgets, reduced salaries for government officials in many areas, and even set up ‘sell the pot, sell the iron office’. Last year, they introduced the ‘trading in old for new’ policy. They’re essentially pushing people to spend by making them feel like they need to exchange old items for new ones. But it’s difficult because people don’t have the money to do so.”
Ms. Liang, a resident from Hefei, Anhui, expressed to Epoch Times, “Currently, the Chinese economy is struggling. Some second-hand markets are thriving, and I often browse platforms like Xianyu and Zhuanzhuan. I buy things from there, including second-hand items like washing machines, mini-fridges, and phones that were used in the office in the past.” She added, “Although it’s a second-hand platform, some products are listed as ‘like new’, almost indistinguishable from new ones. Perhaps they weren’t selling well, so they ended up in the second-hand market. The government pushing for trading in old for new may not resonate with the average person.”
Mr. Lu stated, “Local finances are tight now. The revenue from land sales has plummeted, and the government is allocating more funds for various expenses like social stability. Once the money reaches the banks, it flows into projects such as infrastructure under the guise of different names, eventually landing in the hands of state-owned and large enterprises, or companies established among the well-connected elite. Therefore, despite printing more money, it ends up in the hands of a few individuals, or even being transferred abroad, not circulating in the market. This is why prices aren’t increasing, causing deflation.”
“Any policy by the CCP will be exploited by those close to the centers of power. These national subsidies could also lead to corruption where manufacturers might not get the full subsidy they’re entitled to, or consumers receive only a fraction of the benefit, which doesn’t result in actual consumption. The money is already distributed to the elites. The CCP itself is a collective of corruption,” Mr. Lu added.