Plan for Allocation of Consumer Support Funds and Related Matters
China has unveiled detailed plans for the replacement of new consumer goods, including old cars and home appliances.
According to foreign media reports such as China's Pengpai News and The Wall Street Journal (WSJ) on the 13th, 14 ministries including the Ministry of Commerce jointly announced the "Consumer Goods Replacement Promotion Action Plan" (Action Plan) on the Ministry of Commerce's website the day before.
The Action Plan includes provisions for the central government to allocate funds to support consumers replacing used cars and old home appliances in cooperation with local authorities.
It also contains a policy to encourage local governments to provide incentives to consumers who purchase eco-friendly smart home appliances. When buying new cars, financial institutions will be guided to lower the down payment for auto loans.
China also aims to increase the recycling rates of home appliances and scrapped vehicles by 15% and 50%, respectively, compared to last year by 2025. The replacement policy is intended to boost domestic demand and revitalize the sluggish economy.
Since this is the first nationwide policy in about 15 years, Chinese authorities believe there is sufficient replacement demand. According to Zhongxin Securities, China provided subsidies of 6.41 billion yuan in 2010, which increased new car sales by 49.6 billion yuan.
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