China News Service, Beijing, February 27 (China News Business Reporter Li Jinlei) The fourth meeting of the Central Financial and Economic Commission held recently proposed to encourage and guide a new round of large-scale equipment renewal and replacement of old consumer goods.

  Why is there a new round of large-scale equipment updates and consumer product trade-ins at this time?

How is it different from before?

Who will benefit?

Why implement it?

  In fact, the Central Economic Work Conference held at the end of 2023 proposed that large-scale equipment updates and the replacement of old consumer goods should be promoted by improving technology, energy consumption, emission and other standards.

  The fourth meeting of the Central Financial and Economic Commission made specific arrangements, emphasizing the need to implement a good policy mix to promote the continuous increase in the proportion of advanced production capacity, more high-quality durable consumer goods to enter residents' lives, waste resources to be recycled, and the quality and level of the national economic cycle. A substantial increase.

  The reason for promoting a new round of large-scale equipment updates and the replacement of old consumer goods with new ones is not only a practical need to stimulate investment and consumption, but also an important measure to promote high-quality development.

  Luo Zhiheng, chief economist and director of the research institute of Yuekai Securities, told Sino-Singapore Finance that my country's macro-economy is currently in the post-epidemic recovery period, and the upward trend has not changed, but it faces some difficulties and challenges, especially effective demand. Inadequate consumption, low willingness of residents to consume and enterprises to invest, etc., promoting a new round of large-scale equipment updates and replacing old consumer goods with new ones will help coordinate the expansion of effective demand and supply-side structural reform, lay a solid foundation for economic recovery, and accelerate the green transformation of the economy.

  In other words, this move will effectively promote investment and consumption, which will benefit both the present and the long-term.

  Data map: Workers inspect products coming off the assembly line.

Photo by Zhang Jinggang

What is the difference?

  The meeting required that we should adhere to the market-oriented approach and government guidance, insist on encouraging the advanced and eliminating the backward, and adhere to the guidance of standards and orderly improvement.

  Emphasizing "market-oriented and government-led", a new round of large-scale equipment updates and trade-in of consumer goods highlight a stronger market orientation.

  Luo Zhiheng believes that this is to avoid the one-size-fits-all and movement-style government squeezing the market. Policy guidance must be used to allow market entities to make decisions based on market needs. Only such updates can be sustainable, supported by business logic, and conducive to improving fiscal performance. Financial resource efficiency to avoid possible new overcapacity.

  "We will strengthen support and guidance, and use the improvement of technology, energy consumption, emission and other standards as a guide to break through the difficulties and blockages of replacing old ones with new ones, stabilize and expand traditional consumption, and better meet the needs of replacing and upgrading consumer goods. All of this will We will advance on the basis of respecting the wishes of consumers." The relevant person in charge of the Ministry of Commerce pointed out at the press conference of the State Council Information Office on January 26.

  A new round of large-scale equipment updates and trade-in of consumer goods also places greater emphasis on "standards leadership."

  It is worth noting that in February, the National Development and Reform Commission and other departments issued the "Advanced Level, Energy Saving Level and Access Level of Energy Efficiency of Key Energy-Using Products and Equipment (2024 Edition)", which divided the energy efficiency level of energy-using products and equipment into advanced level, energy-saving level , three levels of access.

Guide various regions and related enterprises to implement product and equipment renewal and transformation, encourage energy efficiency and energy conservation levels after renewal and transformation, and strive to reach advanced levels of energy efficiency.

  Zou Yunhan, deputy director of the Macroeconomic Research Office of the National Information Center, wrote that the last round of trade-in activities was at the stage of universal popularization of large durable goods, mainly to promote popularization, especially in rural areas, while the current round of trade-in activities is at the stage of escalating demand for durable goods. , from the pursuit of "availability" to the emphasis on "good or not", especially the pursuit of intelligence and greenness.

  Car data map.

Photo by China News Service reporter Chen Wen

Who will benefit?

  The meeting pointed out that it is necessary to promote the updating and technological transformation of various production equipment and service equipment, encourage the trade-in of traditional consumer goods such as automobiles and home appliances, and promote the trade-in of durable consumer goods.

Promote large-scale recycling and strengthen the "replacement + recycling" logistics system and the development of new models.

When replacing old consumer goods with new ones, it is necessary to adhere to the linkage between the central finance and local governments to coordinate and support all links of the entire chain to benefit more consumers.

  People are very concerned about the trade-in of traditional consumer goods such as cars and home appliances. This is actually a focus of promoting consumption this year.

  The relevant person in charge of the Ministry of Commerce pointed out that my country's automobile and home appliance markets have entered an "era of equal emphasis on both increment and stock" from a pure "incremental era".

In 2023, there will be about 340 million cars in existence, and the number of major categories of home appliances such as refrigerators, washing machines, and air conditioners will exceed 3 billion units. Some home appliances have been used for more than ten or twenty years, and there is great demand and potential for replacement.

  Dong Zhongyun, chief economist of AVIC Securities, believes that policy incentives can help consumers replace old products and increase their willingness to buy new products, especially the purchase of durable consumer goods such as home appliances and cars, which can have a significant driving effect on the overall consumption scale of society. .

  According to statistics from relevant departments, in June 2009, in order to expand domestic demand, maintain stable and rapid economic development, and promote the comprehensive utilization of resources and the development of a circular economy, the country introduced the "old-for-new" policy for automobiles and home appliances.

In 2010, the two policies continued to be implemented with remarkable results, boosting consumption by more than 170 billion yuan.

  Zou Yunhan believes that this round of trade-in activities has absorbed the experience of the previous round of activities, emphasizing the linkage between central finance and local governments, and emphasizing "coordinated support for all links in the entire chain."

Further optimize the design of this round of policies, fully stimulate the enthusiasm of production companies, platform companies, recycling companies, dismantling companies, and consumers, provide practical support to all participants, and implement the original good policy intentions.