It’s a familiar dilemma for households everywhere: the trusty old car starts demanding more repairs, the decade-old refrigerator hums a little too loudly, or the smartphone screen seems impossibly small compared to newer models. Deciding when to upgrade is a personal calculation. But imagine that decision multiplied across hundreds of millions of households and businesses, nudged along by government policy. That’s precisely what’s happening in China right now, under a nationwide push known as “以旧换新” (yǐ jiù huàn xīn) – literally, “use the old to exchange for the new.”
Walk through any major Chinese city today, browse e-commerce platforms, or simply turn on the news, and you’ll encounter this phrase. It’s emblazoned on banners in electronics stores, featured prominently in car dealership ads, and discussed extensively in economic policy briefings. This isn’t just another seasonal sale; it’s a significant, centrally coordinated campaign designed to stimulate the economy by encouraging the replacement of aging durable goods. The scale is vast, potentially involving hundreds of millions of consumers and driving sales figures already reported in the trillions of yuan.1 In 2024 alone, this initiative was credited with boosting sales of cars and home appliances by over 1.3 trillion yuan (roughly $180 billion USD).1 By April 2025, officials reported that over 120 million people had benefited from subsidies, driving sales exceeding 720 billion yuan (around $100 billion USD) since the start of the year.3
But “Yi Jiu Huan Xin” is more than just an economic stimulus package. It carries the dual mandate of boosting sluggish domestic consumption while simultaneously accelerating China’s ambitious transition towards a greener, smarter economy.5 For Americans seeking to understand the dynamics of the world’s second-largest economy, this policy offers a fascinating window into how Beijing attempts to steer growth, tackle environmental challenges, influence consumer behavior, and potentially impact global markets for everything from electric vehicles to smart refrigerators. This article aims to unpack the complexities of China’s great trade-in drive, explaining its origins, mechanics, impact, and the broader implications for both China and the world, all from the perspective of an American observer on the ground. The government expresses confidence in these measures contributing to its economic goals, seeing potential in its vast market and the dynamism of its enterprises.7
At its core, “以旧换新” (Yi Jiu Huan Xin) refers to a suite of government-supported programs designed to incentivize consumers and, to some extent, businesses, to trade in older, often less efficient or technologically outdated durable goods. Think cars, refrigerators, washing machines, air conditioners, computers, and even, more recently, smartphones and home furnishings. In return for parting with the old, participants receive subsidies or discounts towards the purchase of new items, which are typically required or strongly encouraged to be more energy-efficient, environmentally friendly, or technologically advanced (“smarter”). It’s a targeted form of consumer stimulus, aiming to unlock spending potential tied up in the vast existing stock of household goods.
A Look Back: Not the First Rodeo
For those who follow the Chinese economy, the concept might ring a bell. China implemented a significant wave of similar trade-in policies between 2009 and 2011.6 Launched in the wake of the global financial crisis, those earlier programs, alongside initiatives like “家电下乡” (jiādiàn xiàxiāng – home appliances to the countryside), were primarily focused on boosting domestic demand to offset collapsing export markets and increasing the penetration rate of basic appliances, particularly in rural areas.
The results back then were notable. In the first half of 2010, for instance, the government reported that the car trade-in program alone had subsidized 174,000 vehicles, generating 20.5 billion yuan in new car sales, while the “home appliances to the countryside” program saw sales skyrocket.9 This historical precedent demonstrates that trade-in subsidies are a familiar tool in China’s economic policy toolkit.
However, the current 2024-2025 wave, launched nearly 15 years after the last major nationwide push 11, operates in a different context and carries broader ambitions. While the 2009-era policies often focused on getting first-time appliances into homes, today’s initiative targets a market where basic ownership is widespread. China now has an enormous installed base of consumer durables – estimates suggest over 3.36 billion cars and more than 3 billion major appliances like refrigerators, washing machines, and air conditioners were in use by the end of 2023.10 Many of these items are aging, energy-inefficient, and ripe for replacement. This creates what policymakers see as a massive potential market, possibly worth trillions of yuan, waiting to be unlocked.10
The 2024/2025 Wave: Goals and Ambitions
The resurgence of “Yi Jiu Huan Xin” is driven by a confluence of pressing economic and strategic objectives:
The structure of the “Yi Jiu Huan Xin” policy reveals it as more than just a simple stimulus measure; it functions as a versatile instrument designed to simultaneously tackle economic growth targets, environmental objectives, industrial strategy (nudging manufacturers towards innovation), and societal desires for improved living standards. The specific targeting of types of new goods—NEVs, appliances meeting stringent energy efficiency standards—underscores that this isn’t merely about encouraging spending, but about directing how that money is spent.11 Government pronouncements and economic analyses consistently highlight this dual focus on demand stimulation and structural upgrading.6
Furthermore, a key distinction from the 2009-era policies is the shift in focus from expanding quantity to enhancing quality. While the earlier “Appliances to the Countryside” program aimed to increase basic appliance ownership in less developed areas, the current policy is geared towards upgrading the existing vast stock of goods across the nation.6 The emphasis on high energy efficiency ratings (like Level 1 or 2) and smart features in the 2024/2025 program rules 24 contrasts sharply with the simpler goals of the past.9 This evolution mirrors China’s broader economic narrative of transitioning towards “high-quality development,” prioritizing efficiency, sustainability, and technological advancement over sheer volume. The overarching goal is to establish an effective mechanism where “getting rid of the old is easier, and buying new is more desirable”.11
Navigating the specifics of the “Yi Jiu Huan Xin” program can seem complex, as details often vary by product category and even by province or city. However, the core mechanics involve defined eligibility criteria, specific subsidy structures, and designated funding channels.
Who’s Eligible and What’s Covered?
The 2024/2025 trade-in wave primarily targets several key categories of consumer durables:
The Money Trail: Subsidies and Funding
The financial incentives are delivered primarily through direct subsidies to consumers. Common methods include:
Funding for these substantial subsidies comes from a combination of central and local government coffers.28 A significant portion, particularly for the 2024 and 2025 expansions, is financed through special ultra-long-term treasury bonds.2 The use of these special bonds, which are earmarked for specific strategic projects and fall outside the regular government budget, signals a strong, potentially multi-year commitment to the program and avoids straining routine fiscal resources. In 2024, around 150 billion yuan (approx. $21 billion USD) from these bonds was allocated for consumer goods trade-ins 42, and the first batch of funding for 2025 was announced at 81 billion yuan.2
There’s a clear division of labor: the central government sets the overall policy framework, defines national standards (like car emission levels or appliance efficiency ratings), and provides a large share of the funding. The central government’s funding contribution is often weighted, providing a higher percentage of the subsidy cost (up to 95% in some cases) for less economically developed regions in the west and central parts of the country, compared to the more prosperous eastern regions.42 Local governments (provinces and cities) are then responsible for the detailed implementation, managing the application and disbursement processes, often supplementing central funds with their own budgets, and sometimes setting additional local rules or expanding the scope of eligible products.11 However, if a locality exhausts its allocated central and provincial funds, it typically must cover any further subsidies from its own resources.39
To provide a clearer picture of the incentives on offer, the table below summarizes the typical national guidelines for key categories under the expanded 2025 policy framework:
Table: Snapshot of Key 2025 National Trade-In Subsidies
| Category | Example Eligibility | Typical Subsidy | Max Cap per Item/Person | Notes |
| Car Scrappage | Scrap pre-2012 Gas/pre-2014 Diesel/pre-2018 NEV Car | 15,000 RMB (Fuel) / 20,000 RMB (NEV) fixed | N/A | For purchasing new NEV or ≤2.0L Fuel Car 27 |
| Car Replacement | Replace any registered passenger car | Up to 13,000 RMB (Fuel) / 15,000 RMB (NEV) tiered | N/A | Max subsidy varies by new car price/type; local implementation 29 |
| Appliances (12 types) | Buy Level 2+ efficiency appliance | 15% of sales price | 2,000 RMB per item | Limit 1 per category (3 for ACs) 24 |
| Appliances (12 types) | Buy Level 1+ efficiency appliance | 20% of sales price (15% base + 5% bonus) | 2,000 RMB per item | Limit 1 per category (3 for ACs) 24 |
| Digital Products | Buy Phone/Tablet/Watch (<6000 RMB price) | 15% of sales price | 500 RMB per item | Limit 1 per category 29 |
| E-Bikes | Scrap old e-bike, buy new compliant one | Local Fixed Amount or Percentage | Local Cap | Varies significantly by city/province 29 |
| Home Renovation | Old home/kitchen/bath upgrade, materials, smart home | Local Percentage or Fixed Amount | Local Cap | Varies significantly by city/province/project 29 |
(Note: RMB amounts are approximate conversions. Eligibility details and local variations apply. Sources: 24)
Preventing Problems: Rules and Oversight
Implementing such a large-scale subsidy program inevitably carries risks of fraud, market distortion, and inefficiency. The government appears aware of these challenges and has incorporated measures to mitigate them. Efforts are underway to streamline the application process, leveraging online platforms and reducing bureaucratic hurdles to ensure faster payouts to consumers.27
Simultaneously, strict rules are in place to combat abuse. Policy documents explicitly warn against submitting fraudulent claims (“骗补”), and authorities vow to investigate and penalize offenders, including clawing back disbursed funds.19 Retailers are cautioned against artificially inflating prices to offset the subsidies.19
Crucially, local governments are explicitly forbidden from imposing protectionist measures, such as requiring consumers to trade in old items or purchase new ones from specific, designated enterprises.19 This reflects a broader national push towards creating a unified domestic market and preventing local interests from hindering the policy’s effectiveness or fairness. These detailed regulations and anti-fraud provisions highlight a deliberate attempt by policymakers to strike a balance: maximizing the stimulative impact while maintaining control, ensuring funds are used appropriately, and preserving market integrity.
Since its rollout and subsequent expansion, the “Yi Jiu Huan Xin” policy has generated significant activity in the consumer market, with official channels reporting substantial figures.
Headline Numbers:
The aggregate impact appears considerable. As mentioned earlier, the 2024 iteration was credited with driving over 1.3 trillion yuan in car and appliance sales.1 By the spring of 2025, cumulative figures suggested the program had benefited over 120 million consumers and spurred sales exceeding 720 billion yuan for the year thus far.3 Specific participation numbers released around March 2025 indicated approximately 1.3 million applications for the car trade-in subsidy, over 19 million consumers purchasing more than 25 million subsidized appliances (across the expanded 12 categories), and over 39 million consumers applying for subsidies on nearly 50 million digital products (phones, tablets, etc.).35 Even regional reports point to significant local impact, such as Liaoning province attributing over 15 billion yuan in consumption to the policy in Q1 2025.49 Holiday periods also saw marked upticks, with appliance sales during the 2024 National Day holiday week reaching nearly 18 billion yuan through the program.50
Sector Specifics:
Regional Variations:
Implementation is happening nationwide, but with local tailoring. Provinces like Zhejiang 24, Fujian 34, and Shanghai 33 have published detailed local implementation rules outlining specific subsidy levels and application procedures, sometimes adding local funds or slightly different category definitions. Cities like Nanjing have focused on outreach, bringing policy information and services directly into residential communities, government offices, and businesses (“三进” activity).54 Strong results have been reported from major economic hubs like Shenzhen, where local brands like Huawei saw significant sales boosts, and retailers like JD.com and Suning were major channels for the subsidies.55
The evolution of the policy itself suggests a dynamic response from policymakers. The significant increase in subsidy amounts (doubling for some car categories) and the broadening of scope (adding Guo IV cars, more appliance types, digital products) for 2025 27 came after the initial 2024 rollout showed positive results.1 This suggests that the early successes likely encouraged the government to “double down” on the strategy, leveraging the dedicated funding from special treasury bonds 42 to amplify the stimulus effect and further push towards green and smart consumption.
However, while the headline figures are impressive, obtaining consistent, detailed, and timely public data that breaks down the impact by specific product sub-category, region, or consumer demographic remains a challenge. Official reports often provide cumulative national totals 2 or participation counts by a certain date 35, making precise, real-time tracking of the policy’s nuanced effectiveness difficult for external observers. This opacity means that while the overall direction and scale of the push are clear, a granular understanding of exactly who is benefiting most and which specific incentives are proving most effective is harder to ascertain from publicly available information.
Behind the macroeconomic goals and impressive sales figures are millions of individual decisions made by Chinese consumers. News reports and interviews offer glimpses into their motivations and experiences with the “Yi Jiu Huan Xin” programs.
Consumer Voices and Motivations:
Several key drivers emerge from consumer anecdotes:
The Experience and Potential Hurdles:
The typical consumer journey might involve learning about the policy through advertisements or store promotions, researching eligible products and subsidy levels, making a purchase either online or offline, and navigating the subsidy claim process (which might be instant or require online submission). The final step involves dealing with the old item – either having it collected by the retailer or arranging for separate recycling or disposal.
Despite efforts to streamline the process, consumers can still encounter challenges:
The emphasis placed by major retailers like JD.com and Suning on providing seamless, integrated services—delivering the new, installing it, and taking away the old, often simultaneously—suggests a keen understanding of consumer psychology.12 Overcoming the logistical burden and perceived hassle of disposal 58 appears to be a critical factor in converting interest into actual purchases. For many consumers, the convenience offered by these integrated solutions may be almost as valuable as the financial subsidy itself.
The “Yi Jiu Huan Xin” initiative is not just a government directive; it’s a major market event that businesses across the consumer goods landscape have actively embraced and sought to capitalize on.
Retailer Response:
Major national retailers like Suning易购 (Suning.com) and 京东 (JD.com), along with numerous regional chains and specialized stores (car dealerships, brand-specific appliance outlets), have become key players in implementing the policy.38 They prominently advertise the government subsidies and frequently layer their own additional discounts, coupons, or promotional offers on top, amplifying the financial incentive for consumers.12 Many have set up dedicated “以旧换新” zones within their physical stores and online platforms, making it easy for shoppers to identify eligible products and understand the trade-in process.54 In Shenzhen, for example, 153 consumer electronics and appliance retailers with nearly 1300 stores participated in the local program.55
Manufacturer Engagement:
Leading manufacturers across targeted sectors – including home appliance giants like Haier (海尔), Midea (美的), and Gree (格力), automotive players like BYD (比亚迪) and traditional automakers (e.g., FAW-Toyota, FAW-Volkswagen mentioned in Tianjin event 62), and electronics brands like Huawei (华为) and Xiaomi (小米) – are deeply involved.12 They collaborate closely with retailers on promotions, sometimes co-funding the additional discounts.59 Many have also accelerated the launch of new products specifically designed to meet the policy’s emphasis on energy efficiency, smart features, and green credentials, aligning their R&D and marketing efforts with the national push.52 The policy provides a clear market signal, encouraging investment in upgrading product lines.
E-commerce Platforms:
Given the prevalence of online shopping in China, major e-commerce platforms play a crucial role.38 Platforms like JD.com are frequently cited as key participants 55, leveraging their logistics networks and digital infrastructure to facilitate the entire trade-in process. They often manage the application and verification for instant subsidies, integrate delivery and installation services, and increasingly offer streamlined old-item collection services, sometimes partnering with specialized recycling companies.19
Financial Sector Involvement:
The financial industry is also encouraged to support the initiative. Banks and other financial institutions are prompted to offer consumer credit products tailored to trade-in purchases, potentially including lower down payment requirements for car loans, preferential interest rates, or fee waivers.6 Events launching local trade-in campaigns often feature participation from major banks, signaling their role in facilitating these large-ticket purchases.62
The enthusiastic participation of businesses underscores a symbiotic relationship between policy and commerce. The government provides the framework and core funding, creating a favorable market condition. Businesses then actively seize this opportunity, not just passively channeling subsidies but amplifying them through their own investments in marketing, additional discounts, and crucial service improvements like integrated recycling.12 This private sector engagement, driven by the clear potential for increased sales and market share, significantly magnifies the policy’s reach and appeal, making it more effective than a simple government handout alone.
While the “换新” (buy new) aspect of the policy grabs headlines with impressive sales figures, the “以旧” (deal with the old) component presents a monumental challenge: what happens to the millions of cars and hundreds of millions of appliances being replaced each year?.10 Estimates suggest China generates enormous volumes of electronic waste annually – potentially around 80 million TVs, 50 million refrigerators, 40 million washing machines, 60 million air conditioners, and 30 million computers needing disposal in 2023 alone.50 If not managed properly, this deluge of discarded goods poses significant environmental risks, including the release of hazardous materials like heavy metals and refrigerants into soil and water.45
Recycling Infrastructure Strain:
The sheer volume generated by the trade-in push puts immense pressure on China’s existing recycling and disposal infrastructure. Key challenges include:
Government and Business Efforts:
Recognizing these challenges, policymakers and businesses are taking steps to improve the “reverse logistics” chain:
The experience of Sichuan Zhongzai Resource Development Co., Ltd., one of the licensed dismantling enterprises in Sichuan province, illustrates the formal process: collected appliances are logged, tagged to prevent resale, transported to the facility, sorted, and then processed on specialized dismantling lines that recover materials like copper, aluminum, iron, and plastics while safely capturing hazardous substances like refrigerants.65
However, the scale of the challenge remains immense. The efficiency and capacity of the recycling system are critical for the long-term viability and environmental credibility of the entire “Yi Jiu Huan Xin” program. As some observers have noted, effectively managing the discarded items represents the crucial “second half of the article”.45 Failure to create a convenient, economically sensible, and environmentally sound system for handling the “old” could ultimately dampen consumer enthusiasm for acquiring the “new” (due to the hassle and low scrap value) and undermine the policy’s green objectives. The success of the entire initiative hinges significantly on solving this end-of-life puzzle.
As China doubles down on its “Yi Jiu Huan Xin” strategy, economists and industry analysts are evaluating its effectiveness, sustainability, and potential pitfalls.
Effectiveness Analysis:
There’s a general consensus that the policy has provided a tangible boost to consumption, particularly in the targeted sectors of automobiles and home appliances.6 The significant sales figures reported 1 are seen as evidence of its impact. Analysts point to the policy’s role in stimulating demand during a period of economic uncertainty and sluggish consumer confidence.6
Some attempts have been made to quantify the economic impact. Economists at UBS estimated a multiplier effect of around 1.4 for the initial 150 billion yuan allocated in 2024, suggesting it generated an additional 210 billion yuan in retail consumption beyond normal levels.67 Ming Ming, Chief Economist at CITIC Securities, suggested the multiplier could be between 1.6 and 2.0, estimating that the increased funding for 2025 could lift overall retail sales growth by nearly 1 percentage point.68 The policy is also credited with successfully promoting the shift towards greener and smarter products, as evidenced by the high proportion of energy-efficient appliances sold under the scheme.5
Sustainability and Challenges:
Despite the positive initial results, questions remain about the policy’s long-term sustainability and potential drawbacks:
Broader Context and Outlook:
Experts emphasize that “Yi Jiu Huan Xin” should be viewed within the broader context of China’s economic strategy.18 It aligns with the goals of achieving “high-quality development,” strengthening “dual circulation” (relying more on the domestic market), promoting technological self-reliance (especially in areas like NEVs and smart appliances), and meeting ambitious carbon reduction targets.14 It represents a shift towards using targeted fiscal measures to stimulate specific types of consumption, rather than relying solely on broad-based monetary easing or infrastructure spending.
Looking ahead, some analysts suggest the policy may need to be extended or further expanded to maintain momentum, especially given potential external economic pressures.46 The significant increase in funding and scope for 2025 indicates a willingness by policymakers to sustain the effort.29 International observers, like the Economist Intelligence Unit, see it as part of a policy shift towards boosting consumption, though perhaps still cautious about large-scale handouts.71
Ultimately, this nationwide trade-in campaign serves as a major real-world experiment. It tests China’s capacity to deploy targeted fiscal policy effectively, simultaneously pursuing economic, industrial, and environmental goals. Its ability to navigate the complexities of implementation, manage fiscal costs, and, crucially, solve the end-of-life recycling challenge will determine whether it provides a sustainable boost to the economy or proves to be a costly, temporary fix. The outcomes will undoubtedly influence China’s future macroeconomic management strategies.
China’s massive “Yi Jiu Huan Xin” campaign is far more than a simple discount program. It represents a complex, multi-faceted policy initiative aimed at achieving several critical objectives simultaneously: stimulating a domestic economy facing headwinds, accelerating a nationwide shift towards greener and smarter technologies, upgrading the country’s industrial base, and meeting the evolving aspirations of its vast consumer population.
Launched initially in 2024 and significantly expanded in 2025 with substantial funding from special government bonds, the policy offers direct subsidies to consumers for trading in old cars, appliances, electronics, and other goods for new, often more efficient, versions. Early results indicate considerable success in driving sales, with trillions of yuan in reported turnover and participation by tens of millions of consumers.1 Businesses, from large manufacturers like Haier and BYD to retailers like JD.com and Suning, have actively embraced the program, often adding their own incentives and streamlining services like installation and old-item removal, creating a powerful synergy between public policy and private enterprise.12
However, the program is not without significant challenges. The sheer volume of discarded goods generated puts immense strain on the country’s recycling infrastructure, raising concerns about environmental impact and logistical bottlenecks.10 Effectively managing this “reverse logistics” chain is arguably the most critical factor for the policy’s long-term sustainability and green credentials. Furthermore, questions persist regarding the substantial fiscal cost, the potential for market distortions or simply pulling forward future demand, and the complexities of ensuring fair and efficient implementation across the country.42
From the perspective of an American observer living in China, the scale and ambition of “Yi Jiu Huan Xin” are striking. While the US has had programs like “Cash for Clunkers,” China’s initiative appears broader in scope, more deeply integrated with national industrial and environmental strategies, and implemented with a degree of top-down coordination characteristic of the Chinese system. It leverages the country’s immense market size and the state’s capacity to mobilize resources and direct economic activity towards specific goals.
Is “Yi Jiu Huan Xin” a temporary jolt to the system or the beginning of a more sustained strategy? The significant expansion and funding commitment for 2025 suggest policymakers see it as a key tool for the near future.29 It aligns neatly with China’s overarching narratives of “high-quality development” and boosting domestic resilience (“dual circulation”).14 Whether it successfully recalibrates China’s consumption engine towards a more sustainable, domestically driven, and technologically advanced model remains to be seen. Its evolution will offer continued insights into the changing landscape of Chinese consumerism and the unique ways China navigates its complex economic and environmental challenges.
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