China’s smartphone market contracted in 2025, as government subsidies which were propping the sector up dissipated in the second half of the year. Global Times reported in May that the subsidies—which were rolled out in January—accounted for 50 million units sold, seeing a year-on-year increase of 25.4% for the first four months of 2025.
However, Caixin reports that through the entire year, the total number of smartphones sold was 284 million units—and said that was a contraction of 0.6% year-on-year. It appears that the momentum created by the subsidies in the early part of the year was not sustained. While such subsidies have propped up many of China’s sectors, this demonstrates that once the subsidies end, people tend to stop buying.
Meanwhile, Reuters, citing unnamed sources, suggests that Beijing will introduce new measures focusing on the services sector this year, in order to offset this lack of consumer willingness to spend on goods. It’s not clear who exactly Reuters spoke to, nor what the measures are. The heavy use of subsidies is an indicator of the depth of the problem—the problem being willingness to consume. The lack of a social safety net, and a general pessimism are ongoing issues. We await more details on the measures Reuters talked about, which may indeed include more subsidies.