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Chinese State Council Issues Action Plan on Equipment Renewal and Consumer Good Trade-Ins

Recently, the State Council of China issued an “Action Plan for Promotion of Large-Scale Equipment Renewal and Trade-In of Consumer Goods” (the “Action Plan”). The Action Plan aims to implement the decisions of the Chinese Communist Party’s Central Economic Work Conference and the Fourth meeting of the Central Finance and Economic Committee.

The Action Plan proposes that, by 2027, equipment investment should increase by more than 25% over 2023 levels in the fields of industry, agriculture, construction, transportation, education, cultural tourism, and medical care. The adoption rate of digital R&D tools and the Computer Numerical Control (CNC) rate of key processes at large-scale industrial enterprises should exceed 90 percent and 75 percent, respectively. Compared with 2023 levels, the rate at which scrapped cars are recycled will double, sales of second-hand cars will increase by 45 percent, and the rate at which scrapped household appliances are recycled will increase by 30 percent.

The “Action Plan” specifies 20 key tasks in five categories. The five categories are:

  1. Enable equipment renewal: Promote equipment renewal and transformation in key industries, accelerate equipment renewal in construction and infrastructure projects, support the renewal of transportation equipment and old agricultural machinery, and improve equipment used in the fields of education, cultural tourism, and medicine.
  2. Implement trade-ins for consumer goods: Enable trade-ins of old cars and household appliances, promoting the use of new consumer goods for home renovation.
  3. Recycle and reuse: Improve the network for recycling of used or scrapped products and equipment.
  4. Improve standards: Accelerate improvement standards for energy consumption, emissions, and other technical standards, including technical standards for products.
  5. Strengthen policy support: Increase fiscal policy support, improve tax support policies, optimize financial support, and strengthen support of innovation.

Source: People’s Daily, March 14, 2024