China to Subsidize Smartphone Purchases in Bid to Lift Spending

China will expand consumption subsidies to cover smartphones and other electronics, in a step to promote domestic spending as external headwinds pick up.

A national trade-in program that currently applies to home appliances and cars will broaden this year to include personal devices like phones, tablets and smartwatches, officials from the nation’s top economic planning agency said in a briefing Friday.

Chinese consumers in the post-Covid era have begun holding onto their smartphones longer, given a lack of exciting new features and general belt-tightening. As with cars and washing machines, investors hope incentives will revive the world’s largest smartphone market and drive sales for not just brands such as Huawei Technologies and Xiaomi (1810), but also galvanize business on platforms popular with device fans like Alibaba (9988) and JD.com (9618).

The move is part of China’s efforts to encourage consumption to offset the effects of any new US tariffs on Chinese exports, which have been a key growth driver. For only the second time in at least a decade, top leaders last month made stimulating spending and domestic demand their top priority 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 their equipment, according to Yuan Da, deputy secretary-general of the National Development and Reform Commission.

In late 2024, several provinces had started their own trade-in programs for personal devices and phones, but a nationwide initiative could prove more effective.

(Bloomberg)