How effective is the old-for-new policy in driving domestic consumption and stimulating economic growth? Recently, governmental agencies conducted surveys across more than ten provinces and cities, revealing that over 80% of consumers are aware of the policy, and more than 70% express a willingness to participate actively. This indicates that the policy is making a significant impact on driving demand and promoting consumer spending.
In recent months, the old-for-new policy has gained momentum, particularly for large-scale equipment renewal and consumer goods. The “Measures for Supporting Large-Scale Equipment Renewal and Old-for-New of Consumer Goods” have earmarked approximately 150 billion yuan in long-term special bonds to support local initiatives. Furthermore, detailed guidelines for replacing old vehicles, home appliances, and electric bicycles have been issued, with cities like Beijing, Shanghai, Guangdong, and Jiangsu unveiling their respective implementation plans. This comprehensive policy framework is fueling renewed interest in upgrading consumer goods.
The old-for-new scheme is a powerful tool for expanding domestic demand and boosting consumption. Data shows that the policy has broadened its reach, significantly driving sales in related sectors. In the first three quarters of this year, retail sales of new energy passenger cars surged by 37.4% year-over-year, while retail sales of home appliances and audio-visual equipment saw a 4.4% increase. Thanks to this initiative, big-ticket consumption remains stable, providing a solid foundation for ongoing consumer confidence. This illustrates how fiscal resources can leverage greater social investments and consumer spending.
While the overall economy is stabilizing, there remains insufficient effective domestic demand, necessitating continued efforts to bolster consumption and achieve a higher dynamic balance between supply and demand. Data indicates that by the end of 2023, the total number of registered passenger vehicles in China reached 336 million, with over 3 billion major household appliances like refrigerators, washing machines, and air conditioners in use. Upgrading consumer goods, particularly vehicles and appliances, could unlock a market space worth trillions and promote industry transformation and upgrading. Companies can also leverage large-scale equipment renewal policies to optimize capacity, ensuring structural improvement and stable investment.
To maximize the effectiveness of the old-for-new policy, it’s essential to closely align with new consumer needs and tackle the challenges within the scheme. Incentivizing policies and facilitating smoother flows can create mechanisms that make it easier to trade in the old for new. On the demand side, it is crucial to respect consumer preferences and focus on practical scenarios such as replacing vehicles, appliances, and home decor. Optimizing recycling services and minimizing the time required to receive subsidies will make the process more convenient, regulated, and environmentally friendly, ultimately encouraging greater participation in the old-for-new initiative. On the supply side, there must be increased product innovation, introducing more green, smart, and healthy products that consumers find appealing.
Driving domestic demand and enhancing consumption are vital for economic functionality and improving livelihoods. Strengthening policies that encourage the old-for-new initiative can enhance the quality and scale of consumption, allowing consumers to purchase superior products at lower costs while effectively expanding demand and propelling high-quality economic development.
