National Business Daily:

The State Council executive meeting studied boosting support for large-scale equipment upgrades and consumer goods trade-ins. What new measures will the central finance authorities take in this new round of equipment renewals and consumer goods trade-ins?

Wang Dongwei:

My colleague Mr. Fu Jinling will answer this question.

Fu Jinling:

Thank you for your question. This currently is a hot topic and a policy that is eagerly anticipated by people from all walks of life.

At the beginning of this year, General Secretary Xi Jinping presided over the fourth meeting of the Central Financial and Economic Affairs Commission, making comprehensive arrangements for large-scale equipment renewal and consumer goods trade-ins. Recently, the State Council held an executive meeting to make plans for boosting support in this regard. The MOF has been committed to implementing the decisions and plans of the CPC Central Committee and the State Council, researching and proposing a package of policies and measures. The ministry has made definite arrangements for the allocation of roughly 300 billion yuan in ultra-long special treasury bonds, increasing support in key areas with equipment renewal and further enhancing at the local level the capacity for consumer goods trade-ins. These efforts mainly focus on three aspects:

First, we will focus on greater efforts to boost investment and consumption confidence. We will provide further support for equipment renewal and replacement within key areas. For instance, in terms of automobile scrapping and renewal, for those who scrap passenger cars meeting certain criteria and then purchase new energy or fuel vehicles, we will increase the subsidy per vehicle from 10,000 yuan and 7,000 yuan to 20,000 yuan and 15,000 yuan, respectively, doubling the previous amounts. In terms of agricultural machinery scrapping and renewal, the subsidies for scrapping machinery like combined harvesters and seeders, and replacing them with the same type of machinery, will be increased by no more than 50% based on the current standards. In terms of loan interest subsidy, the interest discount for equipment renewal loans will be increased from 1 percentage point to 1.5 percentage points per annum, subsidized by the central government, further reducing financing costs for business entities.

Second, we will focus on meeting a wider range of investment and consumption needs. We will extend the support scope for equipment renewal to include the energy and power sectors as well as upgrading old elevators. We will also include in the support scope for consumer goods trade-ins the replacement of individual passenger cars, home appliances and electric bicycles, as well as the purchasing of materials for the renovation of old houses, kitchens and bathrooms, and home modifications for the elderly's convenience. These measures aim to better satisfy the people's needs of upgrading consumption and to continuously raise their quality of life.

Third, we will focus on better support to enhance the capacity for promoting consumption locally. Subsidy funds for the scrapping and renewal of cars and old operating freight vehicles, the renewal of new energy buses and their batteries as well as home appliance trade-ins will be jointly covered by the central and local finances in an overall ratio of 9:1. To be specific, the central finance will cover 85%, 90% and 95% of the subsidies in the eastern, central and western regions, respectively, significantly easing the local expenditure pressure. Additionally, local governments will be granted greater decision-making power. Apart from the categories with supporting standards clearly defined by the central financial authorities, a certain amount of funds will be allocated for local governments to conduct trade-ins for other categories of consumer goods in light of local conditions. The specific supported categories and standards will be determined by local governments to better unleash consumption potential.

That's all for my answer. Thank you.