By Jiahui Huang


China has released the details of its trade-in program for consumer products, including cars and home appliances, the country's latest attempt to boost domestic demand.

China's central government will work with local authorities to allocate funds supporting consumers who trade in used cars and upgrade old home appliances, the Ministry of Commerce and other departments said in a joint statement Friday.

Officials will "encourage financial institutions to lower the down payment for auto loans reasonably," according to the statement, which didn't provide the amount of funds to be made available.

Policymakers will encourage certain local governments to provide incentives to consumers buying environment-friendly smart home appliances.

The officials will also release incentives for the purchase of smart home products and encourage the replacement of other household consumer goods.

By 2025, China aims to raise the recycling volume of old home appliances by 15% and the recycling volume of scrapped cars by 50% from 2023 levels, according to the statement.

Beijing launched a similar trade-in program to boost domestic consumption in 2009 and 2010.

China's consumer prices rose only 0.1% in March from a year earlier, according to official data released Thursday, highlighting escalating concerns over China's weak economy due to a sluggish property sector and restrained consumer spending.

Vehicles and household appliances exerted a big drag on inflation, said ING's economist for Greater China, Lynn Song.

Trade-ins of household appliances could see a turnaround later in the year, Song said in a note, although heavy competition in the new-energy vehicle sector could keep transportation prices more subdued.

More supportive policies to boost domestic demand are essential, Citi analysts said in a recent note. The trade-in program and large-scale equipment upgrade are good tools, they reckon.


Write to Jiahui Huang at jiahui.huang@wsj.com


(END) Dow Jones Newswires

04-12-24 0700ET