There is a reason why the Chinese business community is worried. Retail have been sluggish this year as households lock up more of their savings in bank deposits. Yet, despite her best policy intentions, she may be partly to blame.
Chinese consumers, hooked on Beijing’s subsidy program worth 300 billion yuan ($41.1 billion) by 2024, are in trouble. Some have rushed to get their hands on the awards before the program ends on December 31. Others are holding back purchases in hopes of bigger awards next year.
Under Beijing’s trade-in scheme, which has been in place since March, a customer who buys a new home appliance such as a television or a refrigerator is eligible for a discount of 2,000 yuan per item. Chinese retail sales in December and January will likely reflect that dilemma.
“The incentive is already very favorable, but many seem to be greedy,” said Ma Tao, a Shanghai representative of Japanese brand Sharp, whose sales are not meeting expectations. “They keep harping on the subsidy topic. They expect the government to be even more generous in 2025 to stimulate demand.”
People look at home appliances at a store in Changchun, Jilin Province, China in September 2024. Photo: Getty Images
Maybe they have a case. China’s gross domestic product rose 4.8 percent from January to September, below the official target of about 5 percent. Retail sales rose 3 percent year on year in November, the statistics agency said, up from 4.8 percent in October. It fell short of the consensus forecast of 5.3 percent.
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