China allocates 300 billion yuan in special bonds to boost equipment upgrades, consumer goods trade-in programs

Shanghai (Gasgoo)- On July 25, China's National Development and Reform Commission ("NDRC") and Ministry of Finance issued a notice on several measures to intensify support for large-scale equipment upgrades and consumer goods trade-ins (called "the Measures" for short). This directive outlines plans to allocate approximately 300 billion yuan in ultra-long-term special bonds to support these initiatives.

The Measures specify nearly 150 billion yuan in funding for equipment upgrades. The scope of support extends beyond the equipment updates and recycling related to traditional areas like industrial, environmental infrastructure, transportation, logistics, education, culture and tourism, and healthcare, and now includes energy and power sector's facility upgrades, old elevator replacements, energy-saving, carbon reduction, and safety modifications in key industries, with adjustments made dynamically based on actual needs.

Local governments are urged to prioritize support for vehicle scrappage and passenger car replacement for individual consumers, trade-in programs for home appliances and electric bicycles, and purchases of materials for house renovations, including kitchen and bathroom upgrades and elder-friendly modifications. The Measures also aim to boost smart home product consumption.

Automobiles and home appliances are key areas for promoting trade-in programs. Mr. Xu Xingfeng, director general of the Department of Market Operation and Consumption Promotion of China’s Ministry of Commerce, explained that subsidies for consumers who scrap old cars and purchase new ones have been significantly increased. The subsidy for buying a new energy passenger car has been raised from 10,000 yuan to 20,000 yuan, and for a oil-fueled passenger car from 7,000 yuan to 15,000 yuan.

The Measures also clarify increased subsidy standards for the scrappage and renewal of old commercial vehicles and ships, agricultural machinery, new energy buses, and power battery updates.

To address high application thresholds for equipment upgrade projects in industrial sectors and the difficulty small and medium-sized enterprises (SMEs) face in meeting these requirements, the Measures eliminate the "project total investment of no less than 100 million yuan" criterion, allowing more SMEs to benefit from the support policies.

Implementing these policies is crucial. During a special press conference held by the NDRC, Mr. Zhao Chenxin, vice chairman of the NDRC, said that around 150 billion yuan for consumer goods trade-in support and the first batch of approximately 50 billion yuan for equipment upgrades would be allocated shortly. Additionally, a new round of equipment upgrade project applications and reviews will be organized, with plans to disburse the entire 300 billion yuan by the end of August.