"Support Equally with Domestic Companies"
"Emphasize Seizing Opportunities to Increase Investment"
The Ministry of Commerce of China held a briefing session on the government's consumption promotion policy, 'Yijuhuanxin (以舊換新),' for foreign-invested enterprises and economic organization officials, including those from South Korea. Amid growing downward pressure on the economy due to sluggish domestic demand, the session emphasized the details and purpose of this major economic stimulus measure, while also promising efforts to optimize the business environment for foreign-invested enterprises and provide active support.
According to local media such as Pengpai News on the 17th, Lingzhi, Vice Minister of the Ministry of Commerce of China, presided over a meeting for foreign-invested enterprises to interpret the Yijuhuanxin policy for large-scale equipment and consumer goods sectors. Yijuhuanxin is a representative consumption promotion policy in China that provides subsidies when old items are replaced with new ones.
Attendees included representatives from local branches of American companies Ford and GE Healthcare, Philips, Siemens, the world's number one lithium company Albemarle, Italian oil company Eni, as well as officials from economic organizations such as the Korea Chamber of Commerce and Industry in China, the Japan Chamber of Commerce and Industry, the American Chamber of Commerce, and the European Union (EU) Chamber of Commerce.
Vice Minister Ling actively explained the background of the introduction of the Yijuhuanxin policy to the attendees. He emphasized, "The Yijuhuanxin policy for large-scale equipment and consumer goods is a major decision by the Party Central Committee focusing on the overall situation of high-quality development," adding, "It will effectively expand domestic demand, promote investment and consumption, and create a huge market for various enterprises, including foreign-invested companies."
He also stressed, "China will firmly promote a high level of openness, optimize the business environment, and provide equal support for domestic and foreign enterprises to participate in government procurement and project investment related to Yijuhuanxin." Vice Minister Ling further added, "We hope foreign-invested enterprises seize opportunities, deeply study the Chinese market, and increase their investments."
This event was organized just a few days after the release of China's weak economic indicators. On the 15th, the National Bureau of Statistics of China announced that the second-quarter gross domestic product (GDP) increased by 4.7% year-on-year. This figure fell short of both experts' expectations (5.1%) and the previous month's figure (5.3%).
In particular, the domestic demand indicators, which worsened beyond forecasts, are dampening the economic recovery. China's retail sales growth rate, which was around 3.7% in May, dropped to 2.0% last month, significantly below the forecast of 3.3%. This is the weakest performance since December 2022 (-1.8%), when the market was in turmoil following the end of the zero-COVID policy.
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