China News Service, Beijing, March 1st: China’s promotion of a new round of “replacing the old with the new” will bring many benefits
China News Service reporter Liu Liang
The recently held fourth meeting of the Central Financial and Economic Commission proposed to encourage and guide a new round of large-scale equipment upgrades and trade-in of consumer goods, and made detailed arrangements for this.
Industry analysts say that accelerating product upgrading is an important measure to promote high-quality development. It will not only help promote investment and consumption growth, but also bring many benefits.
Practical considerations of “replacing the old with the new”
A new round of “replacing old products with new products” has already been implemented.
The Central Economic Work Conference at the end of 2023 proposed that we should promote large-scale equipment updates and the replacement of old consumer goods with new ones, driven by improving technology, energy consumption, emission and other standards.
The fourth meeting of the Central Financial and Economic Commission will further clarify the deployment.
Ma Yuan, vice chairman of the presidium of the China Household Electrical Appliances Service and Repair Association, said that a new round of "old for new" is a practical need to stimulate investment and consumption.
At present, China's macro-economy is generally in the post-epidemic recovery period, and the upward trend has not changed. However, the home appliance industry generally faces some difficulties and challenges, especially insufficient effective demand and low willingness of residents to consume and enterprises to invest.
Promoting a new round of "replacing old goods with new ones" will help expand the scale of consumption, improve investment expectations, and drive long-term investment growth among enterprises.
Promoting the replacement of old products with new ones in the consumer market and industrial transformation and upgrading complement each other.
Wan Zhe, a professor at Beijing Normal University and executive director of the China Society of Modern Finance, said that currently, China's new energy industry is developing rapidly and is at the forefront of the world in many technologies, products, talents, management, and brands.
The market share of green, digital, and intelligent products and equipment is increasing day by day, which has its own market rules.
Proposing equipment updates at this time is also in line with the logic of economic development.
Multi-point deployment of “old for new”
This meeting made detailed arrangements for a new round of "replacement of old with new".
The meeting proposed that we should adhere to market-oriented and government guidance, insist on encouraging advanced and eliminating backward, adhere to standard guidance and orderly improvement.
In Wan Zhe's view, the previous trade-in for new ones was more government-led and financially supported, but this time it is carried out in a government-guided and enterprise-led manner. The market-oriented tone of letting enterprises "play the leading role" can make the docking of supply and demand more efficient. .
The meeting also gave "guidance" in specific areas and links, such as proposing 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, strengthen the "replacement + recycling" logistics system and the development of new models.
Ma Yan pointed out that promoting large-scale recycling and strengthening the "replacement + recycling" logistics system and the development of new models is a very important part of the old-for-new work.
In recent years, consumers have gained a certain understanding of trade-in, but there are also problems of not replacing old products if they are not broken, not replacing if it is inconvenient, or not replacing if the depreciation price is unreasonable.
Only by clearing up the recycling channels, solving the difficulties and blockages in recycling, and solving the inconvenience for consumers to "send away old products" can we better promote "replacement with new products".
The many benefits of “trade-in”
Promoting a new round of "replacement of old with new" will bring many benefits.
From a consumer perspective, Ma Yan believes that by replacing old products with new ones, consumers can eliminate safety hazards caused by expired products.
At the same time, providing green, smart, new technology, and good-experience products and services to consumers will meet their needs for high-quality life.
Furthermore, with the financial support provided by the central government, local governments, and enterprises, consumers will receive more consumption benefits.
From an industry perspective, the market potential behind it deserves attention.
Many industry research reports point out that "replacing old goods with new ones" will benefit the release of demand for home appliances.
For example, the Beijing Capital Securities research report pointed out that the number of air conditioners and range hoods in rural areas is far lower than that of urban households. It is expected that the implementation of a new round of "old-for-new" home appliances consumption-promoting policies will not only increase residents' renewal of old home appliances, but also accelerate the replacement of old home appliances in rural areas. The inventory of range hoods, air conditioners and other categories increased.
Guotai Junan's research report predicts that this trade-in policy is expected to promote the valuation of home appliance companies.
In Ma Yan's view, the new round of "replacing the old with the new" will help enterprises increase technology investment, eliminate product lines with backward production capacity, and develop more new technology products.
At the same time, government policies focus on guiding and solving the problems encountered by enterprises in the process of recycling old products for new ones, which will facilitate enterprises to better promote the replacement of old products with new ones and recycling. In the long run, it will help the country achieve the "double carbon" goal.
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