Key facts
- China will provide 62.5 billion yuan ($9.2 billion) in consumer trade-in subsidies by the end of June.
- This initiative aims to address the first contraction in retail sales recorded since 2023.
- The 2026 stimulus program is scaled back to 250 billion yuan, a decrease from 300 billion yuan in 2025.
- The subsidies will be narrowed to focus on cars, appliances, and smart glasses.
China is preparing to launch a significant new consumer stimulus package, allocating 62.5 billion yuan ($9.2 billion) in trade-in subsidies by the end of June. This measure is intended to combat the recent contraction in retail sales, marking the first such decline since 2023. The initiative is part of a broader three-year campaign to boost domestic consumption, though signs suggest this campaign is losing momentum. The total funding for the 2026 program has been reduced to 250 billion yuan, a decrease from the 300 billion yuan allocated in 2025. Furthermore, the scope of the subsidies is being narrowed, focusing specifically on items such as cars, home appliances, and smart glasses, indicating a strategic shift towards a gradual phasing out of these broad subsidy programs.