China doubles down on consumer subsidies to spur household spending

The Chinese government has pledged to tackle consumption bottlenecks with a series of support measures, including direct subsidies and efforts to raise incomes, as it seeks to bolster the domestic market amid global volatility.

To stimulate household spending, Beijing will allocate 69 billion yuan (US$9.5 billion) in ultra-long special treasury bonds to its trade-in programme – which offers substantial discounts on a range of consumer goods – National Development and Reform Commission (NDRC) officials announced at a press conference on Friday.

The funds will be issued in October, marking the fourth batch this year and bringing the total to the annual target of 300 billion yuan.

“Consumption is increasingly emerging as a cornerstone of China’s economic growth,” said Zhou Chen, an official with the top economic planner.

The trade-in programme – a tool used by Chinese authorities to drive consumption – has generated over 1.7 trillion yuan in total sales revenue so far this year, with new energy vehicle sales jumping 40.3 per cent year on year, according to NDRC data.

National retail sales, a key gauge of consumption, grew 5 per cent year on year in the first half of 2025 – 1.3 percentage points higher than the same period last year, according to the National Bureau of Statistics.

South China Morning Post