China expands consumer subsidies, but can it ‘save the day’ for economic growth in 2024?

China’s second-largest provincial economy and its biggest city have expanded consumer subsidy schemes to boost household spending despite the risk of hollowing out demand in 2025 but foreshadowing more stimulus next year.

Eastern China’s Jiangsu province on Tuesday announced that it had allocated funds to subsidise trade-ins of mobile phones, tablets, digital cameras, smartwatches and wireless earphones, among other products.

Subsidies for the province of about 85 million people would cover 15 per cent of the purchase price, with discounts of up to 1,500 yuan (US$207) until the end of December, a statement on the provincial website said.

At the end of October, China’s commercial hub of Shanghai also said that it had expanded a trade-in scheme by six eligible products, including coffee machines. The updated scheme would cover 67 product types and 160,000 models.

The city said the change “steps up the enrichment of consumers’ choices”.

Harry Murphy Cruise, an economist at Moody’s Analytics, said Chinese officials would probably move to stimulate consumption again next year because the outlook for its manufacturing and exports would dim under US president-elect Donald Trump.