In early 2023, the State Council launched an initiative called the “Action Plan for Promoting Large-Scale Equipment Upgrades and Consumer Goods Trade-In.” This followed earlier efforts by the National Development and Reform Commission and the Ministry of Finance to support local trade-in and equipment upgrade programs. What specific strategies have different regions implemented to enhance these trade-ins, and how effective have these policies proven to be? Our publication is set to explore these questions in a series titled “The Implementation of ‘Two News’ in Progress.”

Recently, the Ministry of Commerce, along with three other departments, announced an updated notice to boost the trade-in program for home appliances. Building on the initial framework, this new phase features broader subsidy coverage, increased financial support, and more robust backing from the central government. As cities nationwide respond to this renewed push, we are seeing a significant increase in home appliance purchases. What measures have local governments adopted to facilitate these trade-ins, and how have consumers reacted?

The results have been impressive. Deng Lihui, a resident of the Dongying Economic and Technological Development Zone in Shandong Province, has recently discovered the appliance trade-in initiative. With her air conditioner over a decade old, she was eager for an upgrade and ultimately chose a high-efficiency, quiet model. “This air conditioner was originally priced at 4,399 yuan, but with a store promotion, it dropped to 3,699 yuan. After applying the trade-in subsidy of 740 yuan, along with the assessment fee for my old unit, I ended up spending just over 2,000 yuan, which is quite a steal,” Deng explained.

To effectively implement the trade-in policy, Dongying has launched several initiatives this year, including the establishment of ‘Green Smart Consumer Experience Centers’ designed to create innovative consumption experiences that merge technology and service platforms. This approach has fostered a healthy digital economy and revitalized market activity. So far, Shandong has witnessed over 210,000 trade-in applications, marking it among the top provinces in the country. During the recent National Day holiday, retail sales in Shandong amounted to 4.98 billion yuan, reflecting a 3.4% year-over-year increase.

The trade-in initiative has also gained traction as a major trend in Hunan’s consumer market this year. A recent “Implementation Plan for the Trade-In of Consumer Goods Supported by Long-Term Special National Debt Funds” has been announced, offering consumers substantial savings and revitalizing the home appliance sector. By October 6, Hunan reported over 400,000 trade-in transactions valued at 1.737 billion yuan. During the National Day holiday alone, there were more than 190,000 transactions worth 800 million yuan, with brands like Hisense, Gree, and Haier experiencing sales increases of over 100%.

Wang Mi, a manager at the Suning store in Changsha, commented, “Since the trade-in policy kicked off in Changsha, we have seen a notable rise in foot traffic. Items such as washing machines, air conditioners, and televisions are in particularly high demand.” He added that with government support, along with Suning’s additional incentives and manufacturer bonuses, customers can enjoy discounts of up to 65%.

Furthermore, on September 5, Shenzhen unveiled its own plan to enhance the trade-in of consumer goods using special national debt funds. Following the launch, over 30,000 appliances were sold in just five days, totaling over 23 million yuan, with overall sales approaching 200 million yuan.

Qin Shijie, a member of the Shenzhen Development and Reform Commission, revealed that the city aims to reach approximately 1 million appliance sales by the end of 2024. This latest funding round for appliance trade-ins includes a combined total of 1.6 billion yuan from both central and local governments. Compared to previous efforts, Shenzhen’s current program offers a wider selection of eligible products and more significant subsidies, now including items like consumer drones, robots, and other technological devices, with maximum subsidies reaching 20% and qualifying items up to 2,000 yuan.

Corporate participation has also seen a robust response. Following the initial rollout, cities across Hunan have actively promoted these trade-in activities. Changsha was the first to launch on September 6, with other cities like Zhuzhou, Xiangtan, and Yueyang quickly joining. Data from the Changsha Bureau of Commerce indicates that between September 6 and September 16, the trade-in program generated 47,608 transactions totaling 248 million yuan, with government subsidy claims at 45.65 million yuan.

Experts believe the appliance trade-in program is a catalyst for consumer upgrades and improved living standards. Kong Yanglin, Secretary-General of the Hunan Chain Operation Association, highlighted the importance of appliance consumption to residential spending. This initiative encourages appliance manufacturers to present competitive offers and innovative services, ultimately benefiting consumers and invigorating economic activity.

“The trade-in program has breathed new life into physical retail,” states Ou Haijun, Deputy General Manager of Hunan Tongcheng Electric Appliance. Since its inception, sales of televisions, washing machines, refrigerators, and air conditioners have surged over tenfold, particularly for premium products designed to enhance living conditions, like energy-efficient air conditioners and large-capacity refrigerators.

In Feicheng City, Shandong Province, consumers can access appliance subsidies through the “Luhuanxin” mini-program on the Cloud Flash Payment app, limited to one subsidized item per product category, capped at 2,000 yuan. This year, the city’s trade-in policy has significantly expanded subsidies, with 23 appliance retailers participating.

Xu Xingsheng, Deputy Director of the Feicheng Bureau of Commerce, mentioned that during the promotional period, consumers purchasing qualifying products will benefit from direct discounts based on energy efficiency ratings. Retailers are also encouraged to couple this policy with promotional offers to generate greater demand for appliances.

Shenzhen is similarly ramping up support for trade-ins, with 114 companies and 1,369 stores involved. Consumers can locate participating retailers via the Shenzhen Business WeChat account. Online options introduced on September 14 allow consumers to engage in trade-ins through platforms such as JD, Taobao, Douyin, and Meituan.

Peng Jun, General Manager of Suning’s Shenzhen Division, reported a significant growth of 168% in overall sales since the trade-in initiative was launched, indicating that energy efficiency, aesthetics, and smart technology are now pivotal considerations for consumers choosing appliances.

With this renewed emphasis on appliance trade-ins, many companies are actively investing in enhanced discounts and after-sales services to further attract consumer interest. A spokesperson from the Hunan Commerce Department noted that the subsidy for appliances has increased from a maximum of 800 yuan to 2,000 yuan per item, with a goal of achieving 80,000 appliance trade-ins across Hunan by the end of the year.

Shenzhen has expedited the process for trade-in subsidies, reducing administrative layers and accelerating funding distribution to consumers and retailers. Subsidies operate on a “first come, first served” basis, encouraging collaboration among producers, retailers, and platforms to maximize the effects of the trade-in campaign while improving the recycling framework for used appliances.

Liu Jinhua, Director of the Shenzhen Bureau of Commerce’s Circulation and Consumption Promotion Department, announced that the city would also initiate community engagement activities to enhance public awareness. The objective is to strengthen partnerships between manufacturers, distributors, and platforms, while also improving the existing recycling system for old appliances.