China Consumer Rush for Subsidies Overloads Stimulus Program
Customers at an electronics retail store in Beijing.
Photographer: Jade Gao/AFP/Getty ImagesTakeaways
China is testing the limits of what its consumer stimulus can accomplish by subsidizing purchases of select goods, fueling a shopping spree that boosted retail sales growth to the strongest in more than a year but threatening to overwhelm authorities even in the richest regions.
Consumer participation in the home goods trade-in program has seen provinces quickly running out of funds the national government has so far distributed to pay for the subsidies. Henan and Chongqing have been forced to suspend the granting of subsidies or receiving applications for the handouts, according to recent local government announcements and Chinese media reports, while Jiangsu and Guangdong imposed restrictions on the program such as managing its daily quota.