Xinhua News Agency, Beijing, March 15Title: Large-scale equipment renewal and consumer goods trade-in, how to leverage the trillion-yuan market?

Xinhua News Agency reporter Chen Weiwei

The State Council recently issued the "Action Plan for Promoting Large-scale Equipment Renewal and Consumer Goods Trade-in", implementing four major actions: equipment renewal, consumer goods trade-in, recycling and recycling, and standard improvement, and clarifying 20 key tasks in five aspects.

What is the significance of large-scale equipment renewal and consumer goods trade-in?

The fourth meeting of the Central Finance and Economics Commission emphasized that the implementation of large-scale equipment renewal and consumer goods trade-in will effectively promote investment and consumption, which will benefit both the present and the long term.

China has a great demand for equipment renewal. In 2023, the scale of equipment investment in key areas such as industry and agriculture will be about 4.9 trillion yuan. With the in-depth promotion of high-quality development, the demand for equipment renewal will continue to expand, and it will be a huge market with an annual scale of more than 5 trillion yuan.

From the perspective of the market demand for replacing consumer goods, by the end of 2023, the number of civilian cars will reach 336 million, and the number of household appliances such as refrigerators, washing machines, and air conditioners will exceed 3 billion. The replacement of cars and household appliances can also create a market space of one trillion yuan.

"Promoting large-scale equipment renewal and replacement of old consumer goods can promote the continuous increase in the proportion of advanced production capacity, so that more high-quality durable consumer goods can enter the lives of residents, which can not only promote consumption and stimulate investment, but also increase advanced production capacity, improve production efficiency, and promote energy conservation and carbon reduction, and reduce safety hazards. It can be said that it is beneficial to both enterprises and the people, and it kills multiple birds with one stone." A relevant person in charge of the National Development and Reform Commission said.

What are the key points of large-scale equipment renewal and replacement of old consumer goods?

In terms of equipment renewal, the action plan clearly states that by 2027, the scale of equipment investment in industries such as industry, agriculture, construction, transportation, education, culture, tourism, and medical care will increase by more than 25% compared with 2023.

Yu Xiaohui, president of the China Academy of Information and Communications Technology, believes that the action plan has set clear goals for China's investment in equipment renewal in the industrial sector in the next few years, which will effectively release the potential for equipment renewal in the industrial sector, increase advanced production capacity, and improve production efficiency.

In terms of trade-in for consumer goods, trade-in for durable consumer goods such as automobiles and home appliances will be carried out, and home decoration consumer goods will be replaced.

Wang Qing, deputy director of the Institute of Market Economy at the Development Research Center of the State Council, said that the implementation of trade-in for consumer goods will help accelerate the transformation of the consumer market from "whether or not" to "good or bad", and form a Chinese cycle with consumption as the leading force.

In terms of recycling and reuse, the action plan clearly defines the improvement of the recycling network for waste products and equipment. By 2027, the amount of scrapped cars recycled will increase by about one-fold compared with 2023, and the amount of waste home appliances recycled will increase by 30% compared with 2023.

According to Zhu Liyang, president of the China Circular Economy Association, it is estimated that after the meticulous dismantling of a scrapped small car, about 36 kg of rubber, 70 kg of plastic, 740 kg of scrap iron and 100 kg of aluminum can be decomposed; an ordinary refrigerator can recycle 9 kg of plastic, 38.6 kg of iron and 1.4 kg of copper. Proper disposal and recycling of retired equipment and various waste products will help implement a comprehensive conservation strategy and improve resource utilization efficiency.

In terms of standard improvement, the action plan proposes to accelerate the improvement of energy consumption, emissions and technical standards, strengthen the improvement of product technical standards, and strengthen the connection between Chinese and international standards in key areas.

"The standard improvement action is a "baton." Lin Ling, chief expert of the China National Institute of Standardization, said that in combination with the actual development of the industry, taking into account the bearing capacity of enterprises and the acceptance of consumers, accelerating the formulation and revision of standards in the fields of energy conservation and carbon reduction, environmental protection, safety, recycling and utilization will help promote more Chinese products and equipment to develop towards high-end, intelligent and green development.

How to promote the implementation of the action plan?

In the overall requirements, the action plan clearly states that the market should be the main focus and the government should be guided.

Wu Sa, deputy director of the Institute of Economics at the Chinese Academy of Macroeconomics, analyzed that large-scale equipment renewal and replacement of old consumer goods are based on the voluntary behavior of enterprises and consumers, and mainly rely on the market to provide diversified supply and services. At the same time, by increasing policy support and guidance in finance, taxation, finance, investment, etc., we can fully mobilize the enthusiasm of all parties, form an effective mechanism of "easier to get rid of the old and more willing to replace the new", and better play the scale effect of renewal.

The main body of equipment renewal in the industrial field is enterprises. Many enterprises are worried that the investment in equipment renewal is large, the cycle is long, and the effect is slow, which leads to low enthusiasm for renewal and transformation.

Yu Xiaohui said that the action plan proposes to include eligible equipment renewal projects in the scope of financial support such as investment in the central budget, and to include digital and intelligent transformation in the preferential scope. This will further expand the policy coverage, effectively reduce the investment costs of enterprises, and greatly enhance the enthusiasm and willingness of enterprises to update equipment.

In terms of the trade-in of consumer goods, Wang Qing believes that it is necessary to focus on organizing and carrying out trade-in activities in stages and by product category to create a consumer market atmosphere with continuous vitality. Guided by convenience and affordability, we will comprehensively use a variety of policy tools such as consumer subsidies, consumer coupons, and consumer loan interest subsidies, actively give play to the advantages of Internet platform channels, simplify the policy application process, and especially take care of the needs of the elderly and rural residents.

In response to the problems of imperfect recycling networks for waste products and equipment and unsmooth recycling channels, Zhu Liyang said that the action plan proposes to accelerate the development of a "replacement + recycling" logistics system and new models, support enterprises to build a reverse logistics system, and further smooth the standardized recycling channels for products such as scrapped cars and waste home appliances and furniture, which will help improve the efficiency and quality of recycling.

The implementation of the action plan also requires further refinement of policies. According to relevant officials of the National Development and Reform Commission, relevant departments will successively formulate and issue specific policies or specifications in multiple fields such as energy-saving and carbon-reduction transformation in key industries and upgrading of industrial equipment, as well as specific plans for the implementation of the trade-in of consumer goods and the standard improvement action, and continuously improve supporting measures.

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