Despite forecasts of a decline in sales of ICT products, including smartphones and notebooks, by 2026 due to memory supply shortages, China is introducing new purchase subsidies to sustain consumer demand. The government aims to bolster the market with trade-in incentives following policy measures implemented in early 2025.
According to industry sources, China's Ministry of Finance and the National Development and Reform Commission have announced an annual trade-in program allocating CNY62.5 billion (approx. US$8.96 billion) in ICT purchase subsidies. The scheme offers consumers a 15% discount on notebooks and desktop computers, with rebates capped at CNY1,500-2,000 per unit. For smartphones, tablets, and wearable devices such as AI glasses priced under CNY6,000, a 15% subsidy applies with a maximum rebate of CNY500 per item.
Market observers attribute the pressure on demand partly to the surge in memory prices amid inflationary trends, prompting smartphone manufacturers to raise retail prices. This has subdued consumer interest in new ICT products throughout 2024. Stakeholders view the renewed subsidy initiative as a mechanism to invigorate sales and support device makers, retailers, and related industries.
However, concerns remain about the program's long-term effectiveness. A similar subsidy rollout in early 2025 initially drove a spike in first-quarter purchases. Still, sales momentum weakened in the second quarter, largely because consumers accelerated purchases in anticipation of the incentives. Additionally, analysts highlight that recent declines in ICT device sales reflect a combination of factors beyond pricing challenges, including fragile economic growth, extended upgrade cycles, limited innovation, high product homogeneity, and market saturation.
Industry players face considerable difficulties achieving sustained growth in ICT device sales through 2026, as structural issues complicate efforts to maintain vibrant market activity despite government subsidies.
Article edited by Jack Wu
