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

Source: 21st Century Business Herald 21 Finance 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 expand and upgrade consumption of goods. It will allocate RMB 250 billion in special long-term government bonds to support the replacement of old consumer goods with new ones, and to optimize the policy implementation mechanism. It will set up a special fund of RMB 100 billion for fiscal and financial coordination to boost domestic demand, using a combined approach—such as loan interest subsidies, financing guarantees, and risk compensation—to support expanding domestic demand.

Consumption is the main engine for driving economic growth. In 2025, China fully implemented special actions to boost consumption. The scale of the consumer market continued to grow steadily. The total retail sales of consumer goods by society exceeded RMB 50 trillion for the first time, and consumption’s contribution rate to economic growth reached 52%.

Since 2026, the policies on replacing old consumer goods with new ones have been fully rolled out and targeted precisely, covering key areas such as automobiles, home appliances, digital products, and smart products. They have effectively unlocked consumption potential in the market, helping the consumer market get off to a strong start. Localities have also introduced supporting measures one after another, further refining and implementing plans to enable the replacement policy to deliver an even greater effect.

On February 14, Henan released the “Implementation Plan for Promoting Large-Scale Equipment Updates and the Replacement of Old Consumer Goods with New Ones in Henan in 2026,” proposing that by the end of 2026 it will strive to complete around 500k units of vehicle scrappage and replacement updates for individual consumers, as well as around 5 million units of home appliance replacement. Starting February 9, Beijing implemented a new subsidy scheme for replacing old vehicles with new ones, with the maximum subsidy amount up to RMB 20k.

With policies such as replacing old goods with new ones supporting consumption, during the Spring Festival the Guangdong consumer market saw activity on multiple fronts. The consumption structure continued to improve, with both supply and demand in service consumption remaining robust. Daily average retail revenue for household daily appliances such as floor-cleaning robots increased by 137.9% year over year. Retail sales revenue for communication equipment such as smartphones increased by 53.1% year over year. Sales of new energy vehicles increased by 46.8%. The trend of residents upgrading consumption became evident.

Data from the Ministry of Commerce shows that, as of February 23, the replacement program for old consumer goods with new ones in 2026 benefited 500k people, driving sales of RMB 207.03 billion. Demand for smart and green products is strong. As of February 5, the number of applications for automobile replacement subsidies in 2026 reached 335k, driving new vehicle sales of RMB 53.77 billion.

On March 2, the 2026 National Consumption Promotion Month and the Beijing-Tianjin-Hebei Consumption Season kicked off in Tianjin. The Ministry of Commerce said that, as a key special campaign under “Buy in China,” the 2026 National Consumption Promotion Month and the Beijing-Tianjin-Hebei Consumption Season will further optimize how the replacement policy for old consumer goods with new ones is implemented. It will deepen new business formats, new models, and new scenarios in consumption; expand the supply of high-quality goods and services; and promote the integration of multiple scenarios including first-release economy, healthy consumption, green consumption, and smart consumption. It will better meet diversified and quality-focused consumption needs.

The replacement policy for old goods with new ones is an important component of expanding domestic demand and boosting consumption. On March 4, Luo 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 foundation, vigorously boost consumption, and promote the development of a strong domestic market.

On the one hand, expand the supply of high-quality consumer goods and services. Implement the service consumption quality improvement and benefits-to-people action; accelerate the cultivation of new growth points for service consumption; optimize the replacement policy for old consumer goods with new ones to promote expanding and upgrading consumption of goods; create an international consumer environment, enrich consumption scenarios, and hold the “Buy in China” series of activities well.

On the other hand, insist on closely integrating benefiting people’s well-being with promoting consumption. Promote high-quality employment; develop and implement plans to increase income for urban and rural residents to enhance residents’ consumption capacity. Steadily advance equalization of basic public services, improve the education, childcare, eldercare, and medical security systems, and reduce residents’ worries about future consumption.

“This year, the Standing Committee of the National People’s Congress will conduct oversight on areas such as building a unified domestic market and advancing rural revitalization in a comprehensive manner. It will also formulate laws such as the Social Assistance Law, the Medical Security Law, and the Childcare Services Law, and will promote more resources being投入 into areas related to people’s well-being, so that people can consume, dare to consume, and are willing to consume.”

(Editor: Wen Jing)

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