Last night, the financial authorities announced specific plans for the 2026 equipment upgrade and consumer goods trade-in policies, with several details worth noting.

First is the expansion and adjustment of subsidy categories. Smart glasses have been added as a new item, with a 15% subsidy based on the sales price, limited to one piece per person, with a maximum of 500 yuan. It appears to be encouraging a new track of consumption upgrading. The home appliance sector has actually shrunk—reducing the number of categories from previous levels to 6, and the subsidy rate has also decreased from a higher level to 15%, with a single item cap of 1500 yuan. Compared to previous efforts, this round is indeed more moderate.

The changes in the automotive sector are even more noteworthy. Trade-in and scrapping subsidies have shifted from fixed amounts to proportional subsidies, meaning that the subsidy for low-priced models (roughly below 160,000 yuan) will be significantly reduced. Additionally, the scope for replacing with new cars has been tightened—only 2.0-liter and below fuel vehicles are recognized, aligning with earlier market predictions.

In terms of overall scale, funding may decrease somewhat. The first batch in 2026 is allocated 62.5 billion yuan, and with four equal installments, the total for the year is approximately 250 billion yuan. In 2025, the first two batches are 81 billion yuan, and the last two are 69 billion yuan, totaling 300 billion yuan for the year. Judging from this, the total budget for the new year may be reduced by around 50 billion yuan. The progressive adjustment of policy intensity reflects a balanced consideration of fiscal resources.