That’s one takeaway from what Beijing has revealed about its plan for incentives that will encourage Chinese businesses and households to adopt cleaner technologies. It’s widely expected to be one of this year’s main stimulus programs, though question marks remain—including how much the government will spend.
Local governments will be in charge of many practicalities. The city of Suzhou, in China’s wealthy Jiangsu province, already began—announcing subsidies worth 100 million yuan for cars and 20 million for appliances starting April 20. 1. What is China’s trade-in plan? China’s top economic planning agency says investment on equipment upgrades in key industries was 4.9 trillion yuan last year, and the goal is a 25% increase by 2027. Beijing hasn’t specified how much cash it’s ready to provide, though officials have described some of the financing tools.
For industry there’ll be a mix of subsidies, government investment in new equipment, tax breaks for cleaner producers and discounted loans to help firms upgrade. Economists at Citigroup Inc. said in a note that trade-ins under the plan could boost retail sales by about 0.5 percent this year, while equipment upgrades could increase China’s widest measure of investment by 0.4 percentage points through 2027. Last month, Goldman Sachs economists estimated a 0.6 percentage-point lift to GDP in 2024, with more than two-thirds coming from extra household spending, mostly on cars. That figure came before the State Council, China’s cabinet, released details.
Another charge against Beijing, reiterated by German Chancellor Olaf Scholz during a visit last week, is that international firms suffer discrimination in Chinese markets. At the April 11 briefing, a Ministry of Commerce official emphasized foreign and domestic companies will get equal treatment under the trade-in plan.