Consumer Trade-In Policy Gains Momentum as Shandong Optimizes Access and Subsidies, Raising Leverage Ratio to

Since its launch, the consumer goods trade-in policy, supported by ultra-long-term special treasury bond funds, has played a sustained role in improving residents' quality of life and activating the full industrial chain spanning retail, manufacturing, and recycling. From 2026 onward, the policy has stabilized the national consumption market, with the funding leverage ratio rising from 1:7.8 in 2025 to the current 1:10.3. It has driven sales exceeding 1.25 trillion yuan and benefited 169 million people, providing solid support for steady consumption growth while promoting industrial upgrading and resource recycling. Wang Wendong, a Jinan resident in Shandong Province who traded in his old car, said the subsidy arrived quickly after he uploaded his replacement documents online, that both online and offline stores were available, and that switching to a new-energy vehicle saved him money.

The Shandong Provincial Audit Office extended its oversight to the consumer frontline, collecting feedback by visiting supermarkets and car dealerships while building a data-analysis model based on millions of trade-in transaction records to assess long-cycle consumption behavior. The audit found that some localities imposed hidden market-access thresholds requiring local registration, barring outside business operators from participating in local subsidy programs and narrowing the range of products and stores available to consumers. Early-stage fixed-sum auto subsidies were also poorly calibrated, with a disproportionately high share going to low-priced commuter cars while doing little to stimulate demand for mid-to-high-end new-energy vehicles. Multi-tier review processes lengthened subsidy disbursement cycles and increased the burden of upfront capital on merchants. These issues constrained market vitality and undermined the policy's effectiveness in delivering benefits to consumers.

In response to the audit findings, the Shandong Provincial Department of Commerce introduced a package of optimization measures. On market access, it comprehensively removed unreasonable entry requirements such as local registration, and streamlined the filing and public-notice procedures for both online and offline business operators, enabling all compliant merchants—local or otherwise—to participate equally in trade-in programs. The province now counts 15,000 business operators participating in home appliance, automobile, and digital product trade-ins, with community shops, large supermarkets, and online platforms competing on equal footing. On subsidy disbursement and funding security, a pay-first-review-later model has been adopted: consumers upload replacement receipts and installation photos via their phones to complete applications, with the back end cross-checking device serial numbers against transaction documents. A prepayment-plus-periodic-settlement funding mechanism has been established, allowing compliant merchants to draw up to 80% of subsidy funds in advance, with monthly consolidated reconciliation.

On auto subsidy optimization, Shandong has moved away from fixed-amount subsidies in favor of tiered discounts, with both affordable commuter cars and mid-to-high-end new-energy vehicles receiving matching incentives. Home appliance subsidies now prioritize essential household categories such as air conditioners and washing machines, with subsidy categories and discount standards adjusted according to market demand and consumer needs. Zhu Xixin, director of the Market Operation and Consumption Promotion Division of the Shandong Provincial Department of Commerce, said auditors went to the frontline to visit merchants and used big data to quantify consumption shortfalls, providing direction for iterating and refining implementation rules. Guo Xiaoyong, director of the General Office of the Shandong Provincial Party Committee Audit Commission, said trade-in audits will continue, with close scrutiny of subsidy disbursement, market regulation, and policy implementation, alongside routine full-chain penetration checks.

Market data confirms the effectiveness of the policy optimization. From January to July 2026, Shandong received over 13.09 million applications for consumer goods trade-in subsidies, driving sales exceeding 104.8 billion yuan. The subsidy-to-consumption leverage ratio rose to 1:10.2, up 36% year on year, as the policy's multiplier effect continued to strengthen.