subsidies

The U.S. CHIPS Act, designed to boost domestic semiconductor manufacturing, may involve the government taking equity stakes in companies like Intel, TSMC, and Samsung in exchange for subsidies. While not actively pursued now, this approach aims to ensure commitment to significant U.S. investments. TSMC, facing substantial U.S. investments, is reportedly prepared to forgo subsidies rather than accept forced equity, viewing the relatively small subsidy amount as less critical to its overall plans.

Shenyang has reinstated consumer electronics subsidies to boost local spending, running from August 22nd to October 8th. The program targets new smartphone, tablet, and smartwatch/band purchases via platforms like UnionPay and JD.com. Subsidies offer a 15% discount, capped at 500 yuan, on eligible products priced under 6,000 yuan. Consumers can claim subsidies daily on a first-come, first-served basis between 9:30 AM and 6:00 PM, with qualifications expiring at midnight.

China’s food delivery platforms are engaged in intense subsidy wars, offering deep discounts to consumers and boosting order volumes. However, restaurants are struggling to profit, with some even losing money due to platform fees, delivery costs, and merchant-funded discounts. While consumers benefit from lower prices initially, experts warn this “burning money for market share” strategy is unsustainable and could compromise food quality and safety. Platforms and industry associations are now urging for fair competition and a return to value creation.

Beijing is allocating 69 billion yuan in special treasury bonds, the third batch dedicated to stimulating domestic consumption through trade-ins of consumer goods. A final tranche of 69 billion yuan is planned for October. The NDRC, along with the Ministry of Finance and Commerce, will oversee local governments to ensure matching funds and prevent price hikes or subsidy fraud. This initiative, building on a January program, offers subsidies for electronics upgrades, such as 15% discounts (up to 500 yuan) on smartphones, tablets, and smartwatches priced under 6,000 yuan.

The end of subsidized food delivery services has led to a surplus of used electric scooters appearing on Chinese online marketplaces like Xianyu. This oversupply is a direct result of platforms reducing subsidies that previously incentivized delivery drivers to purchase the vehicles. The proliferation of used scooters indicates a significant shift in the economics of the food delivery sector.

Meituan’s local commerce CEO, Wang Putao, addressed concerns about China’s food delivery “war,” acknowledging user anxieties and merchant fatigue caused by intense competition and subsidies. He suggested a return to “rational business judgment” as a path to resolution. Wang outlined potential war-ending scenarios, including annexation, stalemate, or external intervention. Industry insiders view the delivery battle as a platform competition for instant retail dominance, but the long-term sustainability of heavy subsidization is questioned. The benefits for riders and consumers are likely temporary.

A price war in China’s online food delivery market, involving Meituan, Taobao Flash, and JD.com, has led to widespread “free” promotions. This triggered a surge in orders, especially for bubble tea, but also resulted in significant order abandonments. Shops are facing losses as unclaimed drinks are discarded. The situation highlights irresponsible consumption, food waste, and the need for consumers to consider their actual needs before capitalizing on promotional offers, urging respect for labor and resources.

Alibaba’s Taobao Now launched a 50-billion-yuan subsidy program, boosting consumer spending and merchant growth. Early data shows significant increases in orders for food and beverage categories, as well as retail products. This year-long initiative aims to invigorate urban service consumption and provide substantial benefits to both consumers and businesses, fostering a new integrated e-commerce and service ecosystem.

Taobao Flash Deals launched a RMB 50 billion subsidy program, leading to over 100% order growth for 589 brands on day one. Sectors like food, electronics, and apparel saw significant increases. Summer essentials, including heat-relief products and swimwear, are particularly popular. The initiative aims to boost consumer and merchant growth through coupons, red envelopes, and reduced commissions, fostering a collaborative consumption ecosystem.

China is boosting its consumer market with a new round of subsidies to encourage the replacement of old goods. ¥138 billion (approximately $19 billion USD) in central government funds will be released in Q3 and Q4, following the distribution of ¥162 billion in the first half of the year. The program is part of a larger initiative with a total of ¥300 billion allocated and currently about 50% utilized, covering appliances, electronics, and vehicles. Local governments are also expected to contribute.