China extends ‘cash for clunkers’ scheme to rice cookers and microwave ovens.

China has expanded a program to subsidize consumers with old appliances such as air conditioners and washing machines as policymakers seek to combat weak consumption in the world’s second-largest economy.

The policy initiative, launched last year to encourage the purchase of cars and home appliances, includes microwaves, rice cookers, dishwashers and water purifiers, as well as smartphones and tablets priced below Rmb6,000.

Consumers who trade in old goods will receive a 15-20 percent subsidy, according to the National Development and Reform Commission. ChinaRmb81bn ($11bn) will be allocated to the program by 2025, the state planner said at a press conference in Beijing on Wednesday.

The program expansion follows calls for Beijing to do more to support consumer spending as growth slows and a weak property sector weighs on consumer and investor confidence.

Hui Shan, Goldman Sachs’ China chief economist, said the government is thinking about consumption and consumption, adding that the plan has a “very clear impact” on sales volumes.

“The downside of such a policy is that they are only dragging down future demand,” she added. If I replace my air conditioner once every 10 years, you are now pulling the next few years of demand.

The marketing program started at the beginning of last March. Echoing former US President Barack Obama’s “cash for clunkers” initiative, which allowed consumers to trade in old cars for new cars following the 2008 global financial crisis. The 2024 Rmb150bn budget, backed by special government bonds, was used up by the end of the year, the officials said.

The Commerce Ministry said last year 36 million consumers used the scheme to buy Rmb240bn worth of home appliances, resulting in Rmb920bn in car sales.

In addition to home appliances and automobiles, the program aims to encourage companies to upgrade industrial equipment and agricultural machinery.

Last month, the Bureau of National Statistics reported that November retail sales increased by 22 percent year-on-year, with household goods and audiovisual products such as televisions increasing. For the first time since April, the sale of construction and decorative materials covered by the plan has been positive.

But overall retail sales rose just 3 percent in November, missing expectations. Concerns that arise again As for the pace of consumption growth, real estate data showed the steepest annual decline in new home prices since 2015 and the deepest decline in property investment.

China last September Actions initiated To support the equity and housing market, which has struggled to support sales against a backdrop of a year-long property slump. Authorities have also launched similar “replace old with new” housing schemes.

President Xi Jinping last month “Strong” efforts are promised. To strengthen consumer demand this year.

Frederick Neumann, HSBC’s chief Asia economist, said most analysts see trade programs as a short-term confidence-builder, but China needs more policies to sustainably boost consumption.

Additional report by Wang Xueqiao in Shanghai