China cooks up economic growth with appliances

The Chinese government has expanded its consumer trade-in programme to include kitchen appliances like microwave ovens, dishwashers, rice cookers, and water purifiers. 

The scheme offers discounts of up to 20% on new goods, aiming to stimulate the country’s struggling economy.

Previously, state-backed trade-in programs covered items such as televisions, smartphones, tablets, smartwatches, and electric and hybrid vehicles.

China, the world’s second-largest economy, has been grappling with weak consumer demand and a deepening property crisis. On Wednesday, officials announced that 81 billion yuan (£8.9bn; $11bn) has been allocated this year to support the trade-in program.

The National Development and Reform Commission, China’s top economic planning body, said the scheme, launched in March, has shown “visible effects,” with the Ministry of Commerce reporting increased sales of big-ticket items like home appliances and cars.

However, some economists remain skeptical about the scheme's broader impact. Dan Wang, a China-based economist, remarked, “The measure is far from enough to boost consumption.” Harry Murphy Cruise, head of China economics at Moody’s Analytics, added, “While it has supported sales of certain goods, it hasn’t driven a significant uptick in overall spending.”

Amid challenges faced by exporters, China has introduced several measures to support domestic demand. In December, a high-level meeting of Chinese leaders emphasized the importance of “vigorous” efforts to boost consumer spending.

These developments come as geopolitical tensions loom, including President-elect Donald Trump’s threat to impose a 60% tariff on Chinese goods.

China is set to announce its 2024 economic growth figures next week, with Beijing projecting a growth rate of around 5%.