Upgrades, trade-ins to stimulate consumption

China has adopted a package of well-focused measures aimed at promoting a new round of large-scale equipment renewals and trade-ins of consumer goods as part of the country's efforts to push ahead high-quality development, the State Council, the country's Cabinet, said on Friday.

In a concerted effort to drive equipment upgrades and consumer trade-ins, attendees at the State Council Executive Meeting, which was chaired by Premier Li Qiang, have emphasized a market-driven approach with appropriate government guidance.

The initiative aims to encourage the adoption of advanced technologies and phase out outdated equipment, so as to enhance the proportion of advanced production capabilities and bring more high-quality and durable consumer goods into households, the meeting said.

Such stimulus policies have been front-loaded in key sectors, signaling an early push to bolster consumer demand and sustain the positive momentum of macroeconomic recovery in the first half of the year, said Wang Qing, chief macroeconomic analyst at Golden Credit Rating International.

To address the various demands associated with equipment upgrades and consumer goods trade-ins, authorities will intensify fiscal and financial policy support, and leverage standards related to energy consumption, emissions and other technical aspects, the meeting said.

Proactive steps will be taken toward promoting the replacement and upgrade of equipment in sectors such as construction, municipal infrastructure, transportation and outdated agricultural machinery, as well as educational and medical facilities, the meeting said. Meanwhile, there is a strong focus on trade-in programs for automobiles and white goods, fostering a large-scale shift toward advanced technologies.

As of the end of 2023, the country's automobile ownership reached approximately 340 million vehicles, while major household appliances such as refrigerators, washing machines and air conditioners surpassed a staggering 3 billion units, said the Ministry of Commerce.

With some vehicles and appliances having been used for over a decade or even longer, demand for product renewal and replacement is huge and growing, said Guan Lixin, a researcher at the Chinese Academy of International Trade and Economic Cooperation.

As consumers embrace newer and more advanced products, the phenomenon stimulates demand for innovative technologies and encourages manufacturers to invest in research and development, which will help China maintain its competitive edge in global markets, Guan added.