FX.co ★ China to Gradually Disburse Subsidies to Sustain Consumption Drive

China plans to gradually implement the remaining portions of its consumer goods trade-in subsidies to maintain economic stability and prevent funding shortages at the local level, according to the state media outlet, Securities Times, on Wednesday. Of the allocated CNY 300 billion (approximately $41.8 billion) for this stimulus initiative, CNY 162 billion has been dispatched to local governmental bodies. This program encourages households to replace outdated appliances, electronics, and vehicles, significantly boosting retail sales and forming a central part of Beijing's strategy to enhance consumption. However, the rapid adoption of these incentives, particularly in the automotive sector, has put pressure on regional budgets. As a result, at least six cities, including key manufacturing centers, have halted vehicle trade-in subsidies due to concerns over fund mismanagement and exhaustion. This scenario underscores the challenges of expanding short-term stimulus measures across China's expansive and varied economy, prompting authorities to intensify oversight to avert misuse and secure prolonged benefits.