China is expanding consumption subsidies to include smartphones and other electronics.
What Happened: The national trade-in program, which currently covers home appliances and vehicles, will now extend to personal devices such as phones, tablets, and smartwatches.
Officials from China’s top economic planning agency announced this expansion during a briefing on Friday, reported Bloomberg.
The subsidies are expected to rejuvenate the world’s largest smartphone market, benefiting brands like Huawei Technologies Co. and Xiaomi Corp. XIACF XIACY, and platforms like Alibaba Group Holding Ltd. BABA and JD.com Inc. JD.
This initiative is part of China’s strategy to boost consumption and counter potential new U.S. tariffs on Chinese exports.
In late 2024, several provinces initiated their trade-in programs, but a nationwide effort is expected to be more impactful. A detailed plan for the program’s expansion will be released soon.
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Why It Matters: Huawei is already eating Apple Inc.’s AAPL lunch in China. iPhones face fierce competition from Huawei’s next-generation Mate series.
In July, it was reported that Apple's ranking in the Chinese market fell from third to sixth place during the second quarter of 2024. During the same period, Huawei saw a 41% year-over-year surge.
Later in the third quarter, the tech giant's smartphone sales in China dipped by 0.3% year-over-year, securing a 15.6% share of the market. Meanwhile, Huawei experienced a remarkable 42% growth, climbing to a 15.3% market share.
Cupertino is currently providing discounts of up to 500 yuan (about $68.50) on its iPhone 16 models in China. The promotional event will run from Jan. 4 to Jan. 7.
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