China will intensify its efforts to support large-scale equipment upgrades and trade-ins for consumer goods, aiming to further tap into the potential of domestic demand, the State Council, the country's Cabinet, said on Friday.

By allocating funds from ultra-long special treasury bonds, the country aims to provide sustained financial support to these initiatives, according to a decision adopted at the State Council executive meeting chaired by Premier Li Qiang.

It was stressed at the meeting that China will optimize support measures for equipment upgrades, expanding the scope to include the energy and power sector, outdated elevators, as well as energy-saving and carbon-reducing transformations in key industries.

The meeting decided to lower the entry barriers, streamline approval processes and encourage a wider range of sectors to benefit from upgrades.

The upgrades will extend to the transportation sector, with support for scrapping and replacing old operational ships and trucks. Additionally, subsidies for agricultural machinery and new energy buses will be increased, according to the meeting.

To facilitate upgrades, the government will raise the proportion of financial subsidies for loans granted for equipment upgrades, the meeting said.

An action plan released by the State Council in March said China aims to increase its investment in equipment for industry, agriculture, construction, transportation, education, culture, tourism and medical care by at least 25 percent by 2027, compared with 2023.

According to estimates made by the National Development and Reform Commission, the scale of the market generated by equipment upgrades is projected to exceed 5 trillion yuan ($687.8 billion) annually.

Meanwhile, the meeting also decided on measures to support local governments in strengthening their capacity for consumer good trade-in programs, with a focus on enhancing automobile scrappage and replacement as well as subsidies for exchanging old household appliances.

As of 2027, the volume of scrapped vehicles is planned to roughly double from the level of 2023, while used car transactions will increase by 45 percent, the plan states. In addition, recycling of used household appliances will increase by 30 percent by 2027 compared with 2023, according to the plan.

China will take steps to foster a more enabling market climate and provide equal policy support for enterprises of different ownership structures and registration locations. These measures aim to ensure that policies are effectively implemented, providing fair and equal opportunities for all businesses operating in the country, according to the meeting.

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