Recent reports from China’s CCTV highlight an interesting shift in the country’s consumer market, driven by a government initiative aimed at updating appliances and boosting consumer spending, known as the “Two New” strategy. To incentivize this transition, the Chinese government has rolled out substantial financial benefits, which have resulted in a remarkable increase in home appliance sales and a significant rebound in passenger vehicle retail figures.
During the seven-day National Day holiday in 2024, around 2.52 million consumers participated in an exchange program that led to the purchase of 3.75 million units across various major appliance categories. This impressive sales total included refrigerators, washing machines, televisions, air conditioners, computers, water heaters, kitchen stoves, and range hoods, culminating in a revenue of 17.83 billion yuan. The leading categories were air conditioners, refrigerators, and computers, which recorded sales of 4.52 billion yuan, 3.80 billion yuan, and 2.62 billion yuan, respectively.
Since the old-for-new appliance policy was introduced, participation has exceeded 8.24 million consumers, leading to nearly 11.78 million units sold and generating over 55.79 billion yuan in sales revenue.
Meanwhile, in the automotive sector, as of midnight on October 7, the Ministry of Commerce reported more than 1.27 million applications for vehicle subsidies via its replacement platform, resulting in new car sales surpassing 160 billion yuan. Notably, a significant portion of these applications—over 60%—was for subsidies related to new energy vehicles.
The National Day holiday brought an unprecedented wave of appliance upgrades, fueled by enticing discounts and financial incentives. During my recent visit to an appliance store in Nanjing, I saw many eager shoppers, including Ms. Tu and her family, who were in the market for a high-performance washing machine.
In Jiangsu province, an enhanced exchange program was introduced, now including nine additional categories of energy-efficient appliances such as air purifiers, microwaves, induction cookers, and more. Purchases made under this initiative qualify for subsidies ranging from 15% to 20% of the transaction price, with a maximum grant of 2,000 yuan. These government subsidies, combined with retailer promotions, have driven impressive sales growth across appliance stores.
The influx of incentives has made even premium appliances more attainable. For instance, during the holiday, Sichuan province hosted an International Panda Consumption Festival, distributing consumer “red envelopes” valued at 400 million yuan. Promotional materials for the old-for-new exchange program were prominently displayed in appliance stores, enticing citizens to upgrade their outdated products.
Furthermore, the enthusiasm for appliance exchanges is invigorating the home renovation market. In Handan, Hebei, a home improvement store experienced a surge in participation in the exchange initiative. Local businesses are facilitating exchanges for elderly residents by bringing products to community squares, enabling seniors like Mr. Guo to trade in their old appliances with the support of community workers.
In Shanghai, 52 subsidy policies relating to home appliances and decor have been launched, covering over 60 categories of building materials and offering adaptable products for seniors, which also qualify for a 15% subsidy. The benefits of the old-for-new program are prompting quick purchasing decisions among consumers looking to renovate their homes.
The automotive sector, too, has seen a sustained boost in vehicle sales following the implementation of the exchange policy. Preliminary figures from the China Automobile Dealers Association show that retail sales of passenger vehicles reached 2.1 million in September, reflecting a 4% increase year-on-year and a 10% rise from the previous month.
In Yongzhou, Hunan province, a large-scale vehicle purchase event themed “Government Subsidies, Lower Prices, Old-for-New” drew many residents eager to explore the available incentives. Local resident Mr. Chen learned that trading in his old car could earn him up to 20,000 yuan in subsidies, alongside dealership discounts.
Additionally, the local government is not only providing substantial financial assistance but has also simplified the car buying process. Manufacturers are offering “one-stop” services, smoothing the transition from old car surrender to new car pickup.
With high subsidy standards and a user-friendly application process, residents in Zaozhuang, Shandong, can now manage vehicle trading and scrapping subsidies via mobile phones, with disbursements for vehicle upgrades already in motion.
