China’s Consumer Trade-In Program Benefits 178 Million People This Year
China’s consumer goods trade-in program has benefited 178 million people so far in 2026, according to Vice Minister of Finance Liao Min, who announced the figures at a State Council Information Office press conference on August 21. The government has allocated 187.5 billion yuan (approximately $26 billion) for the program this year, driving roughly 1.32 trillion yuan in related product sales.
A Key Pillar of Domestic Demand Strategy
The trade-in program is a central component of China’s broader “Two New” policy framework, which encompasses both large-scale equipment renewal and consumer goods trade-in. As Xinhua News reported, the initiative is designed to stimulate domestic consumption and support economic growth as the country embarks on its 15th Five-Year Plan period (2026-2030).
The program’s scale has expanded significantly since its inception. In 2025, the trade-in initiative achieved 2.61 trillion yuan in related product sales and benefited 366 million people, according to data reported by IT Home. Home appliance trade-in exceeded 192 million units, while phone and digital product purchases surpassed 91 million units. Total social retail sales surpassed 50 trillion yuan for the first time, growing 3.7%, with consumption contributing 52% to economic growth—up 5 percentage points from the previous year.
2026 Policy Structure and Subsidies
The 2026 program operates under unified national standards that took effect on January 1. Consumers receive a 15% subsidy on six categories of home appliances—refrigerators, washing machines, televisions, air conditioners, water heaters, and computers—with a cap of 1,500 yuan per item. Four categories of digital and smart products—phones, tablets, smartwatches and bands, and smart glasses—receive a 15% subsidy capped at 500 yuan per item, as detailed in the policy notice published by the Ministry of Commerce and reported by Nanjing Bendibao.
The auto trade-in component offers tiered subsidies: scrapping an old vehicle for a new energy vehicle (NEV) provides a 12% subsidy up to 20,000 yuan, while scrapping for a fuel vehicle provides 10% up to 15,000 yuan. Replacement without scrapping yields 8% for NEVs (max 15,000 yuan) and 6% for fuel vehicles (max 13,000 yuan), according to the 2026 Auto Trade-In Subsidy Implementation Rules issued by eight ministries on December 31, 2025.
Funding for the program comes from three batches of 62.5 billion yuan in ultra-long-term special treasury bonds. The first batch was pre-allocated in December 2025 to ensure smooth policy continuity ahead of the New Year and Spring Festival shopping seasons, as China News Service reported. The third and final batch was announced in June, bringing total 2026 funding to 187.5 billion yuan.
Complementary Stimulus Measures
Beyond the trade-in program, the government has deployed additional tools to boost consumption. Liao Min announced that a package of fiscal-financial coordination policies has benefited 113 million residents. The central government allocated 100 billion yuan for this package, which includes personal consumption loan interest subsidies and service industry operator loan interest subsidies. In the first half of 2026, these two consumption policies supported approximately 1.31 trillion yuan in resident consumption, with 99 million person-times enjoying interest subsidy benefits, according to analysis from Securities Times.
The government has also launched an invoice lottery program in 50 pilot cities, including Beijing and Shanghai, as 21 Economic reported. The program covers retail, dining, accommodation, culture and arts, entertainment, tourism, sports, and resident services, with a minimum invoice amount of 100 yuan and a single invoice prize cap of 800 yuan. Liao Min said the lottery has driven over 370 billion yuan in related sales.
Economic Context and Market Pressures
The trade-in program operates against a backdrop of significant headwinds in China’s consumer market. Auto retail sales fell 19.5% year-on-year from January through May 2026, reflecting weak consumer confidence and a policy transition gap after the 2025 subsidy program ended. However, NEV penetration exceeded 60% in May—a record for the period—and auto trade-in subsidy applications surpassed 4.12 million by the end of May, as Sina Auto reported.
By late July, the program had already driven over 1.25 trillion yuan in sales and benefited 169 million people, according to data from the Ministry of Commerce reported by China Youth Daily. The August figures represent an additional 9 million beneficiaries and 70 billion yuan in sales in roughly one month, demonstrating the program’s accelerating impact.
Policy Outlook
At the August 21 press conference, Liao Min announced three optimizations to the fiscal-financial coordination package: broadening subsidy scope, adding more financial institutions, and raising ceiling limits. These adjustments follow the July 30 Political Bureau meeting, which called for optimizing these policies to boost domestic demand.
Liao Min also indicated that the Ministry of Finance is developing new policies and measures to be introduced in the second half of 2026, as Xinhua News reported. The continued policy support signals that consumption stimulus remains a top priority as China seeks to build a strong domestic market under its 15th Five-Year Plan.
What to Watch
The trade-in program’s roughly 7x multiplier effect—1.32 trillion yuan in sales driven by 187.5 billion yuan in subsidies—demonstrates significant policy leverage. Key questions moving forward include how the program will evolve in 2027, whether the fiscal allocation will be sustained, and how effectively the government can extend consumption stimulus to rural and lower-tier markets. The NEV going-to-countryside campaign launched in June, with 155 models selected, represents a strategic push to tap into rural market potential.
As the 15th Five-Year Plan unfolds, the trade-in program and its complementary measures are likely to remain central to China’s economic strategy. The announcement of new policies for the second half of 2026 suggests that the government is prepared to maintain and potentially expand its consumption stimulus toolkit in response to ongoing economic challenges.