China to Subsidize Smartphone Purchases to Boost Spending
China will expand consumption subsidies to include smartphones and other electronics to boost domestic spending amid rising external headwinds. Officials from the nation’s top economic planning agency said Friday that a national trade-in program currently covering home appliances and cars will be broadened this year to personal devices such as phones, tablets, and smartwatches. Post-Covid, Chinese consumers have held onto their smartphones longer due to a lack of exciting new features and general belt-tightening. Like with cars and washing machines, investors hope incentives will revive the world’s largest smartphone market and drive sales not only for brands like Huawei and Xiaomi but also for platforms popular with device fans like Alibaba and JD.com. The move is part of China’s efforts to encourage consumption to offset the effects of potential new US tariffs on Chinese exports, a key growth driver. For only the second time in at least a decade, top leaders last month prioritized stimulating spending and domestic demand in 2025. The government will “significantly” increase the sale of ultra-long special treasury bonds to fund the program, which also encourages companies to upgrade equipment, according to Yuan Da, deputy secretary-general of the National Development and Reform Commission. Several provinces started their own trade-in programs for personal devices and phones in late 2024, but a nationwide initiative could prove more effective. The central government committed 300 billion yuan ($41.1 billion) of funds raised from special treasury bonds in July to support the subsidies. Including local government efforts, these incentives led to a surge in car and home appliance sales starting in September. Subsidies for upgrading business equipment will also be expanded to areas including agricultural facilities, according to Yuan. A specific plan for the program’s expansion will be released soon.