The Action Plan for Promoting Large-Scale Equipment Renewal and Consumer Goods Trade-In clearly defines the key industry directions, including construction and municipal infrastructure equipment, transportation equipment, old agricultural machinery, education and medical equipment, and more. Among these, construction machinery is undoubtedly the most directly related industry.
01 Purpose and Significance
The implementation of a new round of large-scale equipment renewal and consumer goods trade-in will help further consolidate and enhance the key role of investment in optimizing the supply structure. This initiative aims to continue promoting economic structure optimization, industrial transformation and upgrading, and accelerate the formation and development of new quality productivity.
02 What’s Different from the Past
Industrial equipment and machinery on the production side are also included in the scope of this policy. The previous round of “trade-in” activities focused on popularizing large durable goods, while this round has shifted from addressing “whether there is” to focusing on “good or not.” This new approach adheres to standards, emphasizing energy consumption, emissions, technology, and other criteria. Green, low-carbon, intelligent, and information technologies will all be used as standards or objects for implementing subsidies.
03 Who Should Receive the Subsidies?
Encouraging “trade-in” raises the question: who should receive the subsidies? The fourth meeting of the Central Finance and Economics Commission proposed that we should adhere to the linkage between the central finance and local governments, coordinate and support all links of the whole chain, and ensure that consumers benefit more.
04 Trends Among Construction Units
Construction units, such as central state-owned enterprises in the construction industry, are actively responding to and implementing the new economic policy by taking the lead in replacing their old equipment. The policy will also require cooperative lessors or subcontractors to provide equipment that meets certain standards in terms of emissions, energy consumption, and technology, thereby further accelerating the elimination of old equipment.
05 End-User Considerations
On one hand, it is difficult to continue operations relying on old equipment. On the other hand, the state and manufacturers provide subsidies for the replacement of old machines. End users need to consider the capital expenditure of equipment replacement, which will take a long time to recover. They must also account for non-economic factors such as long-term demand for the equipment market, growth prospects, and the business environment.
06 Where Does the Old Equipment Go?
After replacing old equipment, where does it go? The new round of “old for new” focuses on the recycling process. It is necessary to implement a comprehensive conservation strategy, speed up the establishment of a sound recycling system, promote the remanufacturing of waste equipment, improve the level of resource recycling, and reduce resource waste and environmental pollution.
07 Industry Impact
Construction machinery is an industry supported by the “old for new” initiative, and a new upswing cycle in the domestic market is expected to accelerate. However, if there is only a demand for replacement and renewal of some old equipment, without an increase in demand in the real estate and infrastructure markets, the vast stock market of construction machinery cannot be leveraged. The future market rebound strength and the degree of digestion of manufacturers’ production capacity still need to be further observed.