In a surprising turn of events, the robust government subsidies designed to fuel China’s consumer “trade-in” programs are facing a temporary pause in several key regions. During the peak of the 618 shopping festival, the highly anticipated national subsidies (“国补”) for household appliances are no longer a given, with many cities transitioning from across-the-board support to a “grab-the-coupon” system.
Reporters observed that in regions like Jiangsu and Guangdong, the process has become a race, with merchants and consumers alike using terms like “limited quantities” and “quota allocation”. Simultaneously, locations such as Chongqing and Hubei have suspended or adjusted their “trade-in” subsidies for consumer goods, including home appliances and kitchen and bathroom renovations.
These “trade-in” incentive programs are a crucial component of China’s strategy to stimulate domestic demand and lift consumer spending. The Ministry of Commerce reports that these initiatives have already driven over $1 trillion in sales this year. The sudden slowdown may be linked to dwindling subsidy funds, as indicated by the announcements from several areas, such as “the subsidy amount for this batch has reached its limit” and “this round of subsidy funds has been used up.” However, analysts suggest that this is a short-term situation, and a new round of subsidies may soon be launched.
**Digital Devices Challenged:**
In Jiangsu, the situation is particularly noteworthy. Currently, the state subsidies for appliances are available on a first-come, first-served basis. However, they are not necessarily available for digital products.
Online, the national subsidies available on major e-commerce platforms in Jiangsu are currently unavailable.
One local consumer shared that they had planned to buy an Apple smartwatch, hoping for a lower price during the 618 sale period. However, they were unable to because the subsidy had been halted.
Offline, reporters visiting large electronics stores and brand outlets in Nanjing, Jiangsu, found that the national subsidies for home appliances and consumer electronics had been suspended since June 1st. However, the subsidies are not completely gone. Instead, they are managed through a “quota” system. Retailers are largely uncertain or uninformed about whether a new round of broad subsidies is coming and when it will arrive.
If consumers still wish to use national subsidies, the process typically involves registration and queueing at the desired retailer. After that, they need to wait for merchants to participate in a “grab” for subsidy quotas on the relevant platforms. Then, consumers will be notified to pay for and use the order.
At a Gree appliance counter in a JD.com electronics store, a salesperson mentioned that using the national subsidy might require waiting for 2-3 months. The sales staff member said that consumers don’t need to compete for these national subsidies; they leave it to the sales staff. The amount available to each store is, however, limited. “We cannot guarantee exactly when we can grab a quota,” they stated.
At an Hisense TV counter, sales staff also mentioned that the wait for the national subsidy might take months. They advised consumers to buy directly if they currently have a need to purchase TVs.
**Deals Still Available:** However, with the 618 sales in full swing, retailers are still offering competitive prices, even without the subsidies.
The above-mentioned Gree counter is showcasing an integrated (1.5 horsepower), energy-efficient air conditioner system. The sales representative said this particular model offers more functions than most similar products and is priced over $6,000. The price drops to around $4,000 with current sales, without a government subsidy. Not all products are as discounted. A similar product with a price of $4,000 has similar offers to the higher-priced option.
The assessment of the “quota” system and the estimated waiting times also vary between different stores and retailers.
At a Midea counter in a Suning.com store, a salesperson said that consumers can use the national subsidy within a few days of registration. The salesperson claimed that they grabbed a quota worth $100,000, and the consumers will be notified very soon. Moreover, taking advantage of price cuts and a national subsidy is highly worthwhile.
In comparison, the subsidy quota for digital products, such as smartphones, is stricter than the one for home appliances. Customers are currently unable to obtain national subsidies for digital products.
In various smartphone brand stores, salespeople have stopped directly mentioning government subsidies, which was the case when the subsidy prices were directly provided. Upon inquiry, salespeople will inform customers about a lack of subsidies; however, they are happy to discuss current in-store promotions.
In an Apple store, consumers were informed of the government price cuts. However, these are exclusively available for older models. In the store, only older mobile models are discounted.
**Nationwide Shortages:**
The subsidy limitations in Jiangsu are not unique. In Chongqing, Hubei, and Guangdong, consumers face similar challenges.
After checking the Guangdong Consumer Goods Trade-In Public Service Platform, reporters found that the discount coupons from the “Guangzhou Home Renovation and Kitchen and Bathroom Event” were suspended from June 5th. Information on the resumption of discounts will be forthcoming. On the JD.com platform, the Chongqing home appliance national subsidy page shows “Activity is being upgraded.” During the upgrade, you will not be able to receive or use national subsidy discounts. Hubei’s smart home subsidy is temporarily unavailable due to activity upgrades.
Inquiries to Guangzhou appliance stores revealed that consumers can indeed utilize coupons once received.
“The number of coupons is limited now. Coupons on the WeChat mini-program are hard to get, as they are quickly taken in the morning. Cloud Pay may have a few more,” stated one retail employee. “When we started, the number of coupons and funds was sufficient. Now, it’s almost the end. The funds are running low. They are all grabbing now. It’s first-come, first-served,” stated another retail employee. Midea Smart Home stated that no customers have reported that they missed out. Generally, coupons can be obtained with appropriate competition.
There is a national plan to deploy $300 billion in ultra-long-term special treasury bonds to help support consumer goods trade-ins.
Subsidies from the state are effective. According to the Ministry of Commerce, trade-ins in five categories of consumer goods have reached $11 trillion as of May 31st. Approximately 175 million subsidies have been distributed directly to consumers. Of those, 49.86 million consumers purchased 77.62 million home appliances in 12 categories. There were 53.53 million consumers who purchased 56.63 million digital products and 57.63 million “trade-ins” of kitchen and bathroom units.
According to AVC, the frequent promotion cycles and the consumer market revival in 2025 have contributed to the aggressive and accelerated pace of government subsidy spending. Spending is expected to reach 70% in the first half of the year.
From the responses of relevant departments in the areas where subsidies have been suspended, the “国补” will not be entirely eliminated. The Chongqing Municipal Commission of Commerce said that the second phase of the trade-in subsidy policy is expected to be released in early June. Representatives from the Jiangsu Provincial Department of Commerce stated that currently, some platforms are undergoing rectification or system upgrades. After these adjustments, consumers will be able to receive and use subsidies normally. Restrictions for each platform and merchant will be implemented.
According to Xiao Yunxuan, an analyst with AVC, those government subsidies initially started with broad, universal subsidies to rapidly stimulate markets with broad subsidies. Since the consumption of funds is more rapid than expected, policy models must transform.
Jiangsu’s “quota allocation” model is becoming a key reference point for national policy adjustments. The system uses a daily and monthly fund allocation limit, combined with a phased subsidy system, to precisely control the pace of fund usage. This change reduces the government’s audit and verification pressure and lowers the risk of fund abuse. It also forces businesses to shift their focus from blindly pursuing subsidy amounts to more market demand and product value-driven competition, promoting the high-quality development of the industry.
Notably, as Ding Lin, Deputy Director of the Comprehensive Department of the National Development and Reform Commission, mentioned at the recently released “China Economic Roundtable” from Xinhua News Agency, accelerating the distribution of funds for consumer goods trade-ins and promoting simplified subsidy application processes.
It appears that the second act of the “国补” program could be just around the corner.
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