Customers apply for subsidies under the trade-in program in Hangzhou, Zhejiang province, in October. [Photo/Xinhua]
China's latest efforts to include more home appliances in the consumer goods trade-in program and offer subsidies for the purchase of digital products this year will further stimulate consumers' appetite for spending, bolster the recovery of consumption and inject strong impetus into the country's economic growth, said industry experts and business executives.
They noted that the move will not only drive the technological advancement and upgrading of the home appliance and consumer electronics industries, but also give a big boost to related industrial chains, including recycling, dismantling and remanufacturing.
It also will facilitate the development of a circular economy, they said, referring to a sustainable approach that keeps materials and products in circulation, thereby reducing waste and environmental impacts.
Their comments came after China announced a raft of measures to expand the scope of the consumer goods trade-in program amid a broader push to boost domestic demand and spur economic growth.
According to a guideline unveiled by the National Development and Reform Commission and the Ministry of Finance last week, China will expand the number of home appliance categories eligible for subsidies from eight last year to 12 this year.
Microwave ovens, water purifiers, dishwashers and rice cookers will be included on the trade-in list for home appliances this year, according to the guideline. Consumers will also be able to enjoy subsidies of up to 500 yuan ($68) apiece when purchasing digital products such as mobile phones, tablets, smartwatches and wristbands.
Guo Meide, president of Beijing-based market research company All View Cloud, said the expansion of the trade-in program will spur people's willingness to replace their old household appliances with new ones, and encourage enterprises to bolster technological innovation and accelerate product upgrades, thus promoting the high-end, intelligent and green transformation of the home appliance sector.
He added that the latest policy measures are of great importance for effectively shoring up consumer confidence and sentiment, unleashing consumption potential and promoting the sustained recovery of the economy, given that shoppers can enjoy steep discounts and subsidies by taking part in the program.
Hong Yong, an associate researcher at the Chinese Academy of International Trade and Economic Cooperation, said, "The 'old-for-new' program is conducive to weeding out consumer goods with high energy consumption and declining performance, promoting the popularization of green and energy-saving home appliances, and improving people's quality of life."
The subsidies for the purchase of digital products will spark the enthusiasm of people for scrapping their old smartphones and buying new ones, which is good news for domestic mobile phone makers, Hong said, adding that the trade-in program will also drive the development of the component manufacturing, service and retail industries.
Qi Yingnan, head of research at market consultancy Counterpoint Research China, said the sales revenue of smartphones in China is expected to see double-digit growth, driven by the expansion of the trade-in program.
In March, the State Council, China's Cabinet, released an action plan to initiate large-scale equipment upgrades and trade-in of consumer goods. Data from the Ministry of Commerce showed that the trade-in program boosted sales of home appliances by 240 billion yuan last year, and the products with the highest energy efficiency level accounted for over 90 percent of the sales revenue.
"The implementation of large-scale equipment upgrades and consumer goods trade-in represents a key direction for boosting the development of the circular economy, and is crucial for speeding up the formation of green production and lifestyles," said Jia Shaoqian, chairman of Chinese home appliance manufacturer Hisense Group.
The guideline last week also stated that more efforts will be made to strengthen recycling and utilization capacities, as well as to support the recycling and disposal of discarded household appliances and electronic products.
Zhou Yunjie, chairman and CEO of Haier Group, said the company is ratcheting up efforts to recycle disused household appliances, with about 2 million such products dismantled and 30,000 metric tons of materials recycled each year.
Sichuan Changhong Gerun Environmental Protection Technology, a subsidiary of home appliance maker Sichuan Changhong Electronics Holdings Group, has been engaged in the dismantling and reuse of old electronic products. It has set up a recycling and information management system for discarded home appliances.
