China allocates initial $11.5 billion in 2026 consumer subsidies
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Under the scheme, consumers purchasing major home appliances are eligible for a 15 per cent subsidy of up to 1,500 yuan per item.
PHOTO: REUTERS
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BEIJING - China is allocating 62.5 billion yuan (S$11.5 billion) from ultra-long special treasury bond funds to fund the first tranche of subsidies for consumers to replace domestic appliances, state news agency Xinhua reported on Dec 30.
Beijing launched the scheme in 2024, providing financial support when consumers replace old appliances, bicycles and even cars, in a bid to shore up domestic demand battered by a years-long housing slump
A total of 300 billion yuan in subsidies was allocated in 2025, double the amount seen in 2024.
In 2026, digital and smart products will be included in the scheme, with smartphones, tablets, smartwatches and smart wristbands qualifying for a 15 per cent rebate, capped at 500 yuan each, China‘s state planner and finance ministry said in a separate statement.
The Xinhua report did not specify the total size of the fund for the 2026 scheme.
Under the scheme, consumers purchasing any of six categories of major home appliances, including refrigerators, washing machines and TVs, are eligible for a 15 per cent subsidy of up to 1,500 yuan per item.
Buyers scrapping old cars receive subsidies equal to 12 per cent of the purchase price of new energy vehicles (NEVs), capped at 20,000 yuan, while those replacing older vehicles with new NEVs get 8 per cent, up to 15,000 yuan.
China‘s economy stalled in November, with the slowest growth in factory output in 15 months and the weakest retail sales since the end of zero-Covid curbs, underscoring the urgent need for new growth drivers heading into 2026.
Chinese leaders have pledged to “significantly” increase the share of household consumption in the economy over the next five years. Household consumption accounts for about 40 per cent of gross domestic product, far below nearly 70 per cent in the United States.
Some government advisers say Beijing should expand policy support for services consumption and aim to lift the consumption rate to about 45 per cent over the next five years.
China will also expand a separate equipment upgrade programme beyond existing sectors such as industry, energy, power, transport, logistics and healthcare to include elevators in old residential blocks, elderly care facilities and fire-and-rescue systems, according to the state planner and finance ministry’s statement. BLOOMBERG, REUTERS
