Beijing, April 16 (Xinhua) -- The Ministry of Commerce and 14 other departments recently issued the "Action Plan for Promoting the Trade in of Consumer Goods" (hereinafter referred to as the "Plan"), proposing 22 measures in carrying out the trade in of automobiles, promoting the trade in of household appliances, and promoting the "revitalization" of home decoration, kitchens, and bathrooms.
Industry experts point out that the implementation of the 'Plan' can release market demand and benefit the development of related industries such as circular economy, which is of great significance for stabilizing market expectations and boosting consumer confidence.

Boosting consumer confidence

With the improvement of people's living standards, there is an increasing demand for product quality, performance, and environmental standards. At the same time, the country is facing important tasks of energy conservation, emission reduction, and green development. The trade in action can help eliminate high energy consuming and outdated consumer goods, promote upgrading, further activate potential consumption capacity, and have important significance in stimulating domestic demand and improving residents' quality of life, "said Hong Yong, a think tank expert at the China Digital Reality Integration 50 Forum.

Zhu Keli, Executive Director of the China Information Association and Founding Director of the National Research Institute for New Economy, pointed out that durable consumer goods such as automobiles and home appliances, as important components of modern life, have a direct impact on consumers' quality of life and happiness due to the speed and quality of their updates. By providing government support and offering discounts to businesses, consumers can reduce the cost of switching to new products, increase their willingness to switch, and effectively stimulate market vitality and consumption potential. The implementation of policies is of great significance for stabilizing market expectations and boosting consumer confidence.

According to Meituan data, since March, the popularity of "trade in" and other services on the platform has significantly increased, with search volume growing by over 110% compared to the same period last year. The search popularity of "trade in" services such as electric vehicles, cars, home appliances, gold, and mobile phones is relatively high. Among them, the search volume for electric vehicle batteries increased by over 990% year-on-year, while home appliances such as refrigerators and washing machines, represented by trade ins, saw an increase of over 100% in search volume.

The head of the Consumer Promotion Department of the Ministry of Commerce stated that the automobile, home appliance, and home decoration kitchen and bathroom markets have a large comprehensive volume and strong driving effect. It has been nearly 15 years since the last round of promoting the nationwide trade in of consumer goods, and the demand for updates has entered a period of concentrated release.

Increase fiscal and financial support

The plan includes arrangements for increasing fiscal and financial support policies, such as linking the central government and local governments to allocate funds to support the scrapping and renewal of automobiles, and encouraging localities with conditions to coordinate the use of funds related to the modern commercial circulation system arranged by the central government.

The central government will focus on supporting the promotion of car trade in. Consumers who scrap high emission passenger cars or meet the conditions for new energy passenger cars and purchase energy-saving or new energy vehicles will be given fixed subsidies, "said Fu Jinling, Director of the Economic Construction Department of the Ministry of Finance. At the same time, localities with conditions are encouraged to coordinate the promotion of trade in of durable consumer goods such as household appliances.

Central investment, central fiscal funds, and other resources will definitely provide financial support for large-scale equipment upgrades and the trade in of consumer goods, and the support will be substantial. At the same time, we also understand that local governments are seriously studying and will allocate certain funds to provide support based on their respective financial situations, "said Zhao Chenxin, Deputy Director of the National Development and Reform Commission.

Zhu Keli stated that the linkage between the central government and local governments to provide financial support and encourage financial institutions to provide loan support under controllable risks will greatly reduce the economic pressure on consumers to trade in old for new, and further promote consumer demand.

Guolian Securities believes that the 'Plan' is of great significance in promoting investment, consumption, energy conservation and carbon reduction, and stimulating the consumption potential of new energy vehicles.

Release market space and promote the development of related industries

Industry insiders point out that the trade in program is expected to release huge market space and benefit the development of related industries.

Zhu Keli pointed out that the implementation of the plan is expected to release huge market space and bring rich business opportunities. Taking automobiles as an example, many consumers are willing to replace traditional fuel vehicles with more environmentally friendly electric vehicles, and the introduction of policies undoubtedly provides support for this transformation. For home appliances, with the continuous advancement of technology, more intelligent and energy-saving new home appliances will gradually replace old products. The 'rejuvenation' in the home decoration, kitchen and bathroom fields will also drive the development of related industries, such as new materials, smart homes and other industries, which will benefit from this

Guolian Securities pointed out that according to calculations, the current number of vehicles classified as National IV or below is approximately 116 million. The implementation of the 'Plan' is expected to accelerate the scrapping of high emission passenger vehicles at or below National IV level, thereby effectively promoting the increase in domestic demand for vehicle replacement. It is expected to drive approximately 1 million passenger car replacement demands by 2024.

Zhao Chenxin said that large-scale equipment updates and the trade in of old consumer goods will inevitably bring about the problem of how to deal with waste equipment and consumer goods. The National Development and Reform Commission will work with relevant departments to smooth out recycling channels, support the circulation and trading of second-hand goods, and improve the level of resource utilization. It is expected that the output value of the resource recycling industry will exceed 4 trillion yuan this year.

The "trade in" initiative has given the circular economy industry a powerful shot in the arm, "said Ding Jian, President of Xianyu. Currently, the scale of the domestic idle goods trading market has exceeded one trillion yuan, and it is expected to exceed 3 trillion yuan by 2025. The 'trade in' initiative can motivate consumers to replace old products and purchase more environmentally friendly, energy-efficient, and efficient new products, greatly increasing the circulation scale of idle goods and ushering in a new upward cycle for the idle trading industry and even the entire circular economy.