Shoppers line up to pay the bill at the JD Home Appliance store in Huaqiangbei in Futian District on Saturday. Daily Sunshine
Residents check out a BYD car on display at Huangting Square in Futian District. Daily Sunshine
Shenzhen's new round of consumer goods trade-ins has achieved positive results over the past few days, raising market confidence that the increase in consumer spending will help bolster the economy.
The city government rolled out an expansive trade-in policy across multiple sectors last week, announcing that it will earmark ultra-long special treasury bonds to boost large-scale equipment renewals and replace old consumer goods with new ones.
The trade-in program will mainly focus on automobiles, home appliances, and home refurbishment.
It will also be expanded to cover smartphones, tablet computers, smart wearable devices, consumer drones, consumer robots, projectors, smart sports equipment (including action cameras), and coffee machines, according to the announcement. Each resident is eligible for a subsidy on only one of these products, with a maximum subsidy of 1,000 yuan (US$140.5) per smartphone and 2,000 yuan per unit for other products.
Through the end of this year, the program is expected to result in 70,000 passenger cars being replaced with new ones, 1 million home appliances being sold, home refurbishment for 51,000 households being made, 250,000 electric bicycles being upgraded, and 1,300 commercial freight trucks and urban buses being renewed, the announcement stated.
Under the policy, residents will be able to enjoy subsidies of between 8,000 yuan (US$1,124) and 20,000 yuan for replacing and upgrading their passenger cars. It applies to expats, according to the local commerce bureau yesterday.
The subsidies will reach up to 80,000 yuan for upgrades of commercial freight trucks and urban buses.
Residents purchasing home appliances are eligible for subsidies amounting to at least 15% of the product's sales price.
The subsidy for home refurbishment is capped at 30,000 yuan per household.
During this past weekend, sales of automobiles, home appliances, and furniture in the city's brick-and-mortar stores have seen sharp increases, with more consumers making purchases thanks to the program's subsidies.
"We are offering a 20% subsidy on eight types of home appliances, with a maximum cap of 2,000 yuan. I have never seen such a substantial subsidy since I started working at this store. The previous maximum subsidy was only about 10%. Some customers have made purchases of home appliances amounting to 80,000-90,000 yuan in one go," Li Xiaowei, the manager of the JD Home Appliance store in Huaqiangbei, said Saturday.
"Customers are definitely happy and welcome the government subsidies for car purchases. For some customers who were hesitating about whether to replace cars, the new policy has helped them make the final decision," said a salesperson at the NIO Motors store in the UpperHills shopping mall in Futian District on Saturday.
"We sold seven cars in two days. The sales volume could peak at the end of this month, with a predicted 30% increase," he said.
Shenzhen's policy came after the State Council released an action plan in March to initiate large-scale equipment upgrades and trade-ins of consumer goods.
During a tone-setting meeting on economic work in December, the country listed the lack of effective demand as one of the difficulties and challenges faced by its economic recovery and urged efforts to expand domestic demand.