China's renewed trade-in program spurs activity, pursues quality

BEIJING - Ms Wu didn't waste a moment. Just after midnight on New Year's Day, the resident of China's southern metropolis of Guangzhou placed an order for a premium smartphone, eager to be among the first to tap into the country's 2026 trade-in subsidies.

After combining merchant discounts with a 500-yuan ($69) national trade-in subsidy, she paid 4,849 yuan for a phone originally priced at 5,999 yuan. "I even got to participate in a lucky draw," she said. "It was quite a bargain."

Wu was part of a surge of Chinese consumers capitalizing on the country's renewed consumer goods trade-in program over the holiday period. Officially launched on Jan 1 with a shift toward quality, the initiative offers rebates for replacing old cars, appliances and electronics with smarter, greener models.

China's policy-backed consumer goods trade-in program generated combined sales of 3.92 trillion yuan in 2024 and 2025, benefiting consumers on 494 million occasions, according to data released by the Ministry of Commerce.

The initiative has helped drive both industrial upgrading and China's green transition. Some 18.3 million automobiles were purchased through the trade-in program during this period, with new energy vehicles accounting for nearly 60 percent of the total.

The 2026 version of this endeavor includes several notable adjustments. For automobiles, eligibility requirements for old vehicles have been relaxed, while the subsidy structure has shifted from flat-rate payments to proportional rebates based on the new vehicle's purchase price, offering up to 20,000 yuan for scrapping old cars or 15,000 yuan for trade-ins.

"This means consumers buying higher-value, more technologically advanced and energy-efficient new vehicles will receive relatively higher subsidy support," said Wang Du, vice-president of the China Automobile Dealers Association.

"This differentiated subsidy design strengthens its guiding role in upgrading the automobile consumption structure toward green, low-carbon and intelligent directions," Wang noted.

The updated program also features expanded digital product subsidies, which include smart glasses and home automation devices, while limiting appliance rebates to products meeting the highest energy efficiency standards.

During the 2026 New Year holiday period, AI-enabled appliances proved particularly popular. According to Suning, a major electronics retailer, the most sought-after products included smart air conditioners with motion-tracking capabilities, refrigerators that identify food items for optimal preservation, and washing machines that automatically adjust modes based on fabric type.

"In previous years, consumers might have weighed the cost between Level 1 and Level 2 efficiency. With the new subsidies, Level 1 has become the absolute mainstream," a Suning representative explained.

Local authorities, notably, wasted no time in leveraging the holiday window to jumpstart the program.

Beijing's subsidy quota for e-commerce giant JD.com sold out immediately after the program launched at midnight on Jan 1, with consumers requesting additional allocations. Shanghai began its first round of registration at 8 am on Jan 1, using a lottery system to distribute subsidies. Shenzhen, Guangzhou and other major cities launched coordinated promotional campaigns combining subsidies with retail discounts.

Early signs suggest strong consumer response. Suning reported that its nationwide store traffic had increased 110 percent during the three-day New Year holiday, compared to the same period in 2025.

Beijing, Chengdu, Shanghai, Nanjing and Hangzhou recorded the highest subsidy usage. In North China's Hebei province, meanwhile, consumers made 133,600 purchases of home appliances and electronics worth 590 million yuan on Jan 1 to 2 alone.

Chinese authorities announced late last month that the trade-in subsidy program for consumer goods would be renewed in 2026 as part of broader efforts to boost consumption, with 62.5 billion yuan in ultra-long special treasury bond funds allocated in advance to support this year's program.

Industry observers note that the upcoming Chinese New Year holiday will represent another critical consumption period. They have emphasized the importance of timely quota replenishment, streamlined redemption processes and enforcement against fraudulent practices, to ensure these subsidies reach genuine consumers.