China's consumer goods trade-in program remained highly popular at the start of the year, especially during the Spring Festival shopping season.

Customers apply for subsidies under the trade-in program for consumer goods in Hangzhou City, east China's Zhejiang Province, Oct. 31, 2024. (Xinhua/Xu Yu)

The Ministry of Commerce (MOC) reported receiving subsidy applications for 10.79 million electronic devices over a four-day period starting Jan. 20, following the inclusion of mobile phones, tablets and smartwatches in the trade-in subsidy program, marking a significant expansion of the initiative launched in March last year.

Moreover, automobile and home appliance trade-ins had reached 34,000 and 1.04 million units, respectively, as of Jan. 23, according to the ministry.

The Spring Festival, or the Chinese Lunar New Year, is the most important holiday in China and an occasion for family reunions, and it falls on Jan. 29 this year.

The strong participation in the trade-in program boosted consumer sentiment in the holiday market. According to Sheng Qiuping, vice commerce minister, the program, along with a series of shopping promotion events, will help meet the growing demand for Spring Festival shopping.

Since last year, "trade-in" has become a buzzword in China's consumer market, driving steady retail sales growth and boosting consumer sentiment.

In 2024, more than 6.8 million vehicles, including gasoline-powered and electric cars, were traded in, while over 56 million home appliances, such as refrigerators, washing machines and computers, were sold under the program. Additionally, the sales of electric bicycles surpassed 1.38 million units.

The total sales value of eligible products under the program topped 1.3 trillion yuan (about 180 billion U.S. dollars) last year, highlighting strong market vitality and immense potential. Notably, purchases of smart and eco-friendly products surged, particularly new energy vehicles (NEVs) and energy-efficient appliances.

The trade-in program has revitalized consumption momentum, promoted a more sustainable economy, and enhanced the quality of life for consumers, according to MOC official Li Gang.

In recent years, consumer spending has become an increasingly important economic driver. In 2024, final consumption expenditure accounted for 44.5 percent of economic growth, boosting GDP by 2.2 percentage points. Consumption now plays a more pivotal role than investment or exports in shaping the economic landscape.

New consumer trends in China have gained significant momentum, including a resurgence in tourism and rapid growth in digital entertainment, online education, and live-streaming e-commerce. Green products, such as energy-efficient appliances and NEVs, have also emerged as new growth areas.

In 2025, supporting consumption will remain a top priority for the government.

At the Central Economic Work Conference in December 2024, China's policymakers, while mapping out economic work for 2025, highlighted the need to vigorously boost consumption and expand domestic demand on all fronts.

As part of its ongoing efforts to boost consumption, China has expanded the trade-in program. In addition to including smartphones, tablets and smartwatches, the government has increased the number of eligible home appliance categories from eight to 12 and added a wider range of passenger vehicles to the program. Approximately 81 billion yuan has been allocated for the first round of funding for the program this year.

Sheng noted that the government will ensure subsidies are delivered to consumers quickly and conveniently.

Local authorities are actively rolling out measures for the trade-in program. For instance, Shandong has launched 10 special initiatives for vehicle and appliance trade-ins, while Jiangsu is offering subsidies for smartphones, tablets and Bluetooth headsets. In Guizhou, an online platform has been set up to streamline the process of applying for subsidies.

Experts predict that with such supportive measures in place, consumer spending will continue to grow steadily this year, while the Chinese economy demonstrates strong resilience, underpinned by solid fundamentals and enormous potential.