250 billion in special national bonds support old-for-new exchanges, "real money" boosts consumption

Source: 21st Century Business Herald 21 Finance and Economics APP Author: Zhang Xu

At 9:00 a.m. on March 5, the opening session of the fourth session of the 14th National People’s Congress was held at the Great Hall of the People. Premier Li Qiang of the State Council, on behalf of the State Council, delivered the Government Work Report to the fourth session of the 14th National People’s Congress.

The 2026 Government Work Report proposes to promote the expansion and upgrading of consumer goods, and to allocate 250 billion yuan in ultra-long-term special government bonds to support consumer goods trade-ins and upgrades, while optimizing the policy implementation mechanism. A special fund of 100 billion yuan for fiscal-financial coordination to boost domestic demand will be established, and a combined approach such as loan interest subsidies, financing guarantees, risk compensation, and other measures will be used to support expanded domestic demand.

Consumption is the main engine driving economic growth. In 2025, China implemented special actions to boost consumption in depth. The size of the consumer market steadily expanded, with the total retail sales of consumer goods by society first exceeding 50 trillion yuan, and consumption’s contribution rate to economic growth reaching 52%.

Since 2026, the trade-in and replacement policy for consumer goods has been fully implemented and targeted with precision, covering key areas such as automobiles, home appliances, digital devices, and smart products. It has effectively unlocked consumer spending potential in the market and helped the consumer market get off to a strong start. Localities have also introduced supporting measures one after another, further refining and implementing plans to ensure the trade-in and replacement policy delivers even greater effects.

On February 14, Henan released the “Implementation Plan of Henan Province for Promoting Large-Scale Equipment Renewal and Trade-in and Replacement of Consumer Goods in 2026,” proposing that by the end of 2026 it strives to complete around 500,000 units of scrappage and replacement updates for automobiles by individual consumers, and around 5 million units of home appliance trade-ins. Starting from February 9, Beijing implemented a new subsidy plan for automobile trade-ins and replacements, with the maximum subsidy amount up to 20,000 yuan.

With policies such as trade-in and replacement helping to support consumption, during the Spring Festival the Guangdong consumer market saw multiple bright spots. The consumption structure continued to improve, and both supply and demand for services consumption remained strong. The average daily retail revenue of household appliances used in daily life such as floor-cleaning robots increased year on year by 137.9%. Retail sales revenue of communication devices such as smart phones increased year on year by 53.1%. Sales of new energy vehicles increased year on year by 46.8%. The trend of upgrading residents’ consumption was evident.

According to data from the Ministry of Commerce, as of February 23, the trade-in and replacement benefits for consumer goods in 2026 reached 31.127 million person-times, driving sales of 207.03 billion yuan. Demand for intelligent and green products is strong. As of February 5, the number of applications for automobile trade-in and replacement subsidies in 2026 reached 335,000, driving new car sales of 53.77 billion yuan.

On March 2, the 2026 National Consumption Promotion Month and the Beijing-Tianjin-Hebei Consumption Season were launched in Tianjin. The Ministry of Commerce said that, as a key special activity under “Buy in China,” the 2026 National Consumption Promotion Month and the Beijing-Tianjin-Hebei Consumption Season will further optimize the implementation of the trade-in and replacement policy for consumer goods, deepen new business formats, new models, and new scenarios in consumption, expand the supply of quality goods and services, promote first-launch economy, healthy consumption, green consumption, and smart consumption, and advance the integration of business travel, culture, sports, and multiple other scenarios, better meeting diversified and higher-quality consumption needs.

The trade-in and replacement policy is an important component of expanding domestic demand and boosting consumption. On March 4, Lou Qinjian, spokesperson for the fourth session of the 14th National People’s Congress, said that this year, China will adhere to expanding domestic demand as the strategic cornerstone, vigorously boost consumption, and push forward the building of a strong domestic market.

On the one hand, expand the supply of quality consumer goods and services. Implement the action to upgrade service consumption and benefit the public, and accelerate the cultivation of new growth points in service consumption; optimize the trade-in and replacement policy for consumer goods to promote the expansion and upgrading of goods consumption; create an internationalized consumption environment, enrich consumption scenarios, and hold well the “Buy in China” series of activities.

On the other hand, insist on closely combining improving people’s livelihoods with promoting consumption. Promote high-quality employment, formulate and implement plans to increase income for urban and rural residents, and strengthen residents’ consumption capacity. Advance steadily the equalization of basic public services, improve the education, childcare, elderly care, and healthcare security systems, and reduce residents’ concerns about consumption afterthoughts.

“This year, the Standing Committee of the National People’s Congress will conduct oversight on building a unified domestic market and advancing rural revitalization in an all-round way, among other areas. It will develop laws on social assistance, medical security, and childcare services, etc., and help ensure that more resources are directed to areas related to people’s livelihoods, so that people can consume, dare to consume, and want to consume.”

(Editor: Wen Jing)

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