Local governments halt some subsidies on purchases ahead of China's 618 shopping festival
With e-commerce platforms gearing up for one of China's biggest shopping festivals of the year, some local governments have suddenly paused subsidies offered for certain goods through a national trade-in programme, upending expectations that the offerings would continue all year.
As of Thursday, consumers in Guangzhou, the capital of the southern provincial powerhouse of Guangdong, found that they could no longer claim vouchers for home-remodelling products such as doors, ceramic tiles and sofas, which previously offered subsidies of up to 20,000 yuan (US$2,785) per person.
The city has also halted subsidies for home appliances and electronics.
Jiangsu province halted online shopping vouchers on Sunday but has continued to issue limited daily vouchers for offline purchases, while Hubei province and other cities in Guangdong, including Shenzhen, Dongguan and Zhongshan, have stopped subsidies for smart home appliances, according to an announcement on e-commerce platform JD.com, one of the channels where consumers could apply for the subsidy.
This is the
second year of China's trade-in programme, which aims to boost consumption and ease overcapacity across sectors. Having been expanded from product replacements, the programme now uses hundreds of billions from the sale of
ultra-long-term special government bonds to offer 15-20 per cent discounts on select goods.
Last year, most local government subsidies lasted until the end of the year, so the abrupt midyear halt this year – ahead of what is known as the 618 shopping festival, with e-commerce platforms looking to maintain sales momentum – caught some people off guard.
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