In early November, China’s most populous province launched its biggest ever consumer subsidy programme, with the government pledging to commit 3.5 billion yuan (US$492 million) to offer discounts on a slew of products: from smartphones to snowboards.
Guangdong’s scheme is the latest attempt by Chinese authorities to use consumption vouchers to boost domestic spending – a campaign that is key to China’s efforts to shore up growth and rebalance its economy amid the ongoing US trade war.
But on the ground, the huge new programme has received a tepid response. Locals in Guangdong told the Post the subsidies were unlikely to convince them to up their spending – especially on non-essential items.
Despite the big headline figures, the vouchers often did not provide attractive discounts in practice, they said. And many consumers are still being cautious amid an uncertain economy and a shaky job market.
The lack of enthusiasm underscores the challenges facing Guangdong – one of China’s technology and export powerhouses – as the region of 128 million people strives to revitalise a local economy that is feeling the effects of the trade war and a prolonged property downturn.
Guangdong’s new subsidy programme – which launched amid great fanfare on November 3 – will last until March next year, with the goal of driving a surge in foot traffic and spending during the coming National Games and major public holidays like Spring Festival.
The 3.5 billion yuan package – which combines direct subsidies and promotional campaigns designed to boost consumption – is the largest programme of its kind the province has ever offered and covers the widest range of goods.
Consumers can receive discounts of up to 5,000 yuan (US$700) off purchases of certain cars, 1,000 yuan off home appliances, 500 yuan off electronic devices, and smaller discounts when visiting restaurants, karaoke bars and other entertainment venues.
For the first time, there will also be up to 500 yuan discounts on an array of sporting goods, such as treadmills, rowing machines and skateboards – part of an effort to tap into emerging consumption trends and promote healthy lifestyles.
But the offers have fallen flat with some local residents. Su Yuru, a translator living in Guangzhou, the provincial capital, has no plans to spend more during the campaign.
“I carefully checked and found most vouchers are basically like a 10 per cent discount,” she said. “That doesn’t motivate me to buy anything extra.”
The campaign can also be patchy, with some offers only valid in certain cities, according to Su. “For example, the domestic laptop I wanted can’t be bought using the voucher in Guangzhou,” she said.
For big-ticket items, the incentives appear even weaker. “I’m not going to buy a 150,000 yuan car just to save 5,000, not in this economy,” said He Ying, an operations manager at a tech start-up in Foshan, a city bordering Guangzhou.
Meanwhile, younger consumers living on a tight budget are already able to make bigger savings by buying products via second-hand shopping platforms, which have soared in popularity in China over recent years.
“For trendy toys, cameras and smart devices, I always like to check second-hand platforms first,” said Zhou Lin, a student in her 20s. “Many items are almost new and much cheaper than retail. It’s more cost-effective than waiting for vouchers.”
Guangdong, however, is under pressure to make the campaign work. The province’s economy grew 4.1 per cent year on year in the first three quarters of 2025, below the national average of 5.2 per cent. Retail sales have been sluggish, rising just 2.8 per cent year on year in the first three quarters.
With Guangdong in danger of missing its annual growth target and even losing its status as China’s largest regional economy to the eastern Jiangsu province, restoring consumer demand is critical, said Peng Peng, executive chairman of the Guangdong Society of Reform, a local government-affiliated think tank.
“If local demand can be effectively unleashed, Guangdong can still maintain its long-held economic lead,” Peng said.
The subsidy scheme will also coincide with one of Guangdong’s largest cities, Shenzhen, becoming the host of the 2026 Asia-Pacific Economic Cooperation (Apec) forum, with the metropolis set to hold a series of major events over the course of the year. Guangdong aims to leverage the forum to attract overseas tourists and boost the local hospitality, retail and cultural sectors.
The province has already distributed the first tranche of funds for the programme to municipal governments. According to the provincial finance department, the scheme will operate based on a “performance-based allocation” system, meaning cities that have the most success in boosting consumption will receive more funding in subsequent rounds.
So far, the most sought-after discounts have been vouchers for restaurants and entertainment venues, according to local residents.
“I saw vouchers offering like 200 yuan off if you spend 1,000 yuan, or 100 yuan off if you spend 500 yuan, but they sell out instantly,” said Zhu Yinghua, a retired teacher based in Guangzhou. “If I get one, I might go sing karaoke with friends.”
The demand suggests that vouchers may drive some extra discretionary spending, though mostly among those already intending to spend.
Small businesses, however, complained they were being sidelined, with many voucher programmes tied to large e-commerce platforms and chain outlets.
“Only big brands can benefit,” said Chen Hua, a milk tea vendor in Foshan. - SOUTH CHINA MORNING POST
