A worker inspects the equipment in an intelligent workshop of a fastener-producing company in Yongnian District of Handan, north China's Hebei Province, Feb. 20, 2024. [Photo/Xinhua]

China will offer "strong" financial support to promote the large-scale renewal of equipment and the trade-in of consumer goods, and fiscal support from the central government will focus on key areas like new energy vehicles, said officials from the country's top industry regulators on Thursday.

They made the remarks as several ministries have launched detailed implementation plans for driving standards, industrial equipment and infrastructure recently, after the State Council released in March an action plan for large-scale equipment updates and consumer goods trade-ins to drive consumption and green transformation.

Zhao Chenxin, deputy director of the National Development and Reform Commission, said: "It is certain that the country will leverage central investment and central fiscal funds to offer financial support for large-scale equipment updates and consumer goods trade-ins, and such support will be strong. Local governments will also allocate certain funds based on their situations."

Zhao said the country's renewal efforts are expected to drive a market scale of over 5 trillion yuan ($690 billion) per year in key areas such as the industrial and agricultural sectors. Coupled with the recycling market, such efforts will make great contributions to the country's economic growth.

"But the launch of policies is not only to promote consumption and investment, but also drive energy conservation and carbon reduction, as well as contribute to the transformation and upgrade of economic and social development and high-quality development," he added.

According to the action plan, the scale of equipment investment in areas including industry, agriculture, construction, transportation, education, culture, tourism and medical care, is targeted to increase by more than 25 percent by 2027 compared with last year.

As of 2027, the recycling volume of scrap vehicles is expected to roughly double from 2023, and used car transactions will increase by 45 percent, while the recycling of used household appliances will increase by 30 percent compared with 2023, the plan said.

Specifically, Fu Jinling, head of economic construction of the Ministry of Finance, said on Thursday that the central government will launch targeted fiscal policies, and fiscal support from the central government will mainly focus on promoting the replacement of old cars.

"Certain subsidies will be given to consumers who scrap high-emissions passenger cars or purchase new energy cars that meet energy-saving requirements. Such funds will be shared proportionally by the central government and local governments," Fu said.

"The central government will also allocate funds to support pilot projects of charging and swapping facilities in county-level regions to improve charging infrastructure, optimize the consumption environment and stimulate the potential of NEV consumption in rural areas," he added.

Meanwhile, local governments are encouraged to leverage service industry development funds to coordinate the equipment renewal of consumer goods like home appliances, he added.

Yu Xiaohui, head of the China Academy of Information and Communications Technology, a Beijing-based think tank, said that the country's efforts in promoting the large-scale renewal of equipment and the trade-in of consumer goods will effectively stimulate market potential. In the industrial sector, they will increase advanced production capacity and improve efficiency.

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