Expert Interpretation 4 ｜ The new round of trade-in policy for consumer goods is a strategic traction measure to promote high-quality development.

Over the past 40 years of reform and opening up, the living consumption level of Chinese people has been greatly improved, and a historic leap has been achieved from insufficient food and clothing to a well-off society in general and then to a well-off society in an all-round way. With the change of development stage, people’s yearning for a better life is stronger, and the demand for upgrading the stock of consumer goods is constantly improving. Adapting to the new stage, new changes and new requirements, and promoting a new round of trade-in of consumer goods is not only beneficial to the present, but also beneficial to the long term, which is of great significance and role in promoting high-quality economic development.

First, the significance of implementing a new round of consumer goods trade-in.

(1) It is conducive to adapting to the changes in the development stage and promoting the continuous expansion of consumption.

Since the reform and opening up, China’s economy has grown rapidly, durable consumer goods have been fully popularized, and the problem of "whether there is" has been basically solved. By the end of 2022, the number of cars with 1,000 people in China had reached 226, and the average number of air conditioners, refrigerators, washing machines and color TVs per 100 households reached 133.9, 104.2, 99 and 118.9 respectively. In the context of the rapid growth and popularization of durable consumer goods, policies such as trade-in in the early stage put more emphasis on stimulating incremental consumption and stabilizing economic growth. With the change of development stage, the demand for upgrading the stock of consumer goods is constantly increasing, and China’s consumer market is generally entering an era of paying equal attention to both increment and stock. Trade-in of consumer goods is conducive to accelerating the transformation of the consumer market from "whether there is" to "whether it is good" and forming a domestic cycle with consumption as the leading force.

(2) It is conducive to consolidating the economic recovery and improving the quality and level of the national economic cycle.

Consumption is the "stabilizer" and "ballast stone" of economic growth, and promoting consumption is the inherent requirement of promoting a virtuous circle of economy. At present, a large number of potential consumption in China still needs to be stimulated, and a virtuous circle of mutual promotion between consumption and investment is accelerating, and the chain of "consumption-employment-income" needs to be further unblocked. Activating the consumer market by exchanging the old for the new, releasing potential consumption and cultivating new consumption will help to provide stronger market demand support for enterprise management, thus stabilizing enterprise production and investment expectations, improving market participants’ confidence, promoting the smooth realization of production cycle and promoting China’s sustained economic recovery.

(3) It is conducive to promoting the change of development momentum and cultivating new quality productivity.

China’s consumer market continues to emerge a series of new consumption different from the past, which has become a new kinetic energy and new growth point to promote high-quality development. By expanding the renewal of existing consumer goods, the scale effect of innovation and development of new consumption and new formats will be formed, which in turn will have a strong innovation leading and pulling effect on upstream manufacturing and guide the upgrading of upstream manufacturing industrial structure to adapt to the changes in demand structure. The demand potential released by trade-in will help guide and support enterprises to increase scientific and technological innovation and new product research and development, promote technological upgrading and progress in related industries, foster the formation of new quality productivity, and achieve more quality and efficient growth. Trade-in of old products will push the economy to a higher level of dynamic balance in which demand pulls supply and supply creates demand, which is conducive to the dual promotion of domestic and global product competitiveness in the new era.

(4) It is conducive to meeting people’s needs for a better life and enhancing people’s well-being.

Owning and enjoying higher quality durable consumer goods is an important embodiment of people’s yearning for a better life. Trade-in is not a simple replacement of similar products, but a higher-end, smarter, more environmentally friendly and more personalized demand trend. With the increase of the service life of consumer goods in stock, the performance of a large number of cars and household appliances is getting worse, the emissions are getting higher, and even there are security risks. By exchanging old products for new ones to support the transformation and upgrading of residents’ consumption, high-quality products that are energy-saving, environmentally friendly and intelligent will enter residents’ lives, which will help improve people’s quality of life and enhance their sense of acquisition, happiness and security.

Second, the focus and focus of effectively starting and continuously promoting the trade-in of consumer goods

First, vigorously stimulate and fully mobilize the enthusiasm of all parties. Adhere to the linkage between the central and local governments, coordinate and support all links in the whole chain, and realize the coordinated linkage and comprehensive policy of production, supply and marketing, upstream and downstream, government, enterprises and people, online and offline, benefiting more consumers. Strengthen the central government’s policy support, arrange special funds from the central government, improve tax support policies and optimize financial support, and give better play to the guiding role of local governments and business entities. Optimize the design of policy mechanism, fully stimulate the enthusiasm of production enterprises, platform enterprises, recycling enterprises, dismantling enterprises and consumers, and implement the original intention of good policies.

The second is systematic planning to get through the key blocking points of the supply and demand cycle. In the past, fiscal policy was more biased towards infrastructure investment and upstream manufacturing. From the current point of view, it is necessary to pay more attention to the leading and leading role of consumers. In policy implementation, it is necessary to respect consumers’ choices, enhance consumers’ ability to pay, give play to consumers’ subjective initiative, and focus more on how to lead and drive consumers to upgrade, indirectly forming a virtuous circle of mutual promotion between supply and demand. Promote the circulation of commodities through the trade-in action, enhance the transaction value of commodities in all links, and create a reasonable profit space for market players. Solve the outstanding shortcomings in the whole cycle of production, circulation, consumption and recycling of products, and fundamentally form a systematic policy effect.

The third is to promote flexibly and continuously release the consumption potential. Focus on organizing and carrying out trade-in activities by stages and product categories, so as to create a consumer market atmosphere with continuous vitality in generate and avoid the fatigue of consumers caused by concentrated activities. Guided by convenience and material benefits, we will comprehensively use various policy tools such as consumer subsidies, consumer coupons, and interest subsidies for consumer loans, actively give play to the advantages of Internet platforms, and simplify the policy application process, especially taking care of the needs of the elderly and rural residents. Strengthen the safety publicity of durable consumer goods, actively organize theme activities, and gradually improve consumers’ awareness of safety precautions in the use of old household appliances. Through the way of regional pilot, we will innovate, promote, evaluate and improve, and properly solve the new problems in the implementation of this round of trade-in policy.

Fourth, give consideration to both length and weakness, and strengthen the construction of systems and standards. Take a new round of trade-in as an opportunity to promote the improvement of the basic system of consumer market governance, accelerate the construction of a high-standard market system, and create a good institutional environment for consumer innovation. Gradually strengthen the construction of recycling industry system, guide recycling enterprises and individual operators to gradually integrate into unified management, and continuously improve the quality of circulation services. Adhere to the guidance of standards and orderly promotion, and further improve the management system and industry standards of product life cycle. Support industry associations, individual enterprises, experts and scholars to actively participate in the formulation of standards, strengthen the convergence of international and domestic standards in key areas, and let more high-quality durable consumer goods enter residents’ lives.

Fifth, strengthen support and constantly improve the consumption supporting system. Overall planning and construction of a number of urban comprehensive logistics centers, professional distribution centers and e-commerce logistics nodes, and improvement of urban logistics distribution facilities such as docking, loading and unloading. Improve the logistics infrastructure network and sales service system in rural areas, promote the construction of regional commercial logistics distribution centers and terminal distribution outlets, and promote the innovation of consumption formats. We will improve the resource recycling system for scrapped cars and used household appliances and furniture, improve the network layout of household appliances and furniture recycling, promote the construction of recycling outlets and centralized storage and transportation points as a whole, and encourage the establishment of recycling bins in qualified communities to facilitate residents to handle small household appliances.

(the State CouncilWang Qing, deputy director and researcher of Market Economy Research Institute of Development Research Center; Wang Nian, deputy director and associate researcher of the Research Office of Market Economy Research Institute of the State Council Development Research Center)