China bets on kitchen appliances to boost economy

To boost its sluggish economy, the Chinese government has expanded the range of goods eligible for its trade-in program, allowing consumers to receive discounts of up to 20% when purchasing new items. The newly added goods include household appliances such as microwave ovens, dishwashers, rice cookers, and water purifiers.

Previously, the state-backed trade-in scheme already covered products like televisions, mobile phones, tablets, smartwatches, as well as electric and hybrid vehicles. As the world's second-largest economy, China is currently facing multiple challenges, including weak consumer demand and a worsening real estate crisis.

On Wednesday, officials announced that 81 billion yuan (approximately £8.9 billion or $11 billion) would be allocated to the consumer goods trade-in program this year. China's top economic planning agency stated that these programs have already produced "visible effects" since their launch in March. According to the Chinese Ministry of Commerce, these policies have boosted sales of big-ticket items such as home appliances and automobiles.

However, some economists question whether these programs will be sufficient to significantly increase consumer demand. Chinese economist Wang Dan stated, "This measure is far from enough to stimulate consumption." Harry Murphy Cruise, China economic director at Moody's Analytics, also pointed out that "while it supports sales of certain goods such as cars and home appliances, it has not driven overall consumer spending growth."

In recent months, China has been actively taking more measures to support its domestic economy as Chinese exporters face increasing challenges. Last December, a key meeting of Chinese leaders emphasized the need for "vigorous" efforts to stimulate consumer spending. Meanwhile, President-elect Donald Trump, who is set to return to the White House this month, has threatened to impose a 60% tariff on goods made in China. China is scheduled to release its 2024 economic growth figures next week, with Beijing stating that it expects a growth rate of around 5%.