China Expands Equipment Upgrade and Trade-In Subsidies by $11 Billion in 2025
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China is increasing its efforts to boost economic activity in 2025 with expanded subsidies for equipment upgrades and consumer product trade-ins, backed by a central government allocation of 81 billion yuan ($11 billion).
The new measures aim to stimulate spending and modernize industries, building on the success of similar initiatives in 2024.
The National Development and Reform Commission (NDRC) and the Ministry of Finance on Wednesday issued guidelines to extend support for equipment upgrades to new sectors, including electronic information, safety production and agricultural facilities.
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- China plans to allocate 81 billion yuan for 2025 to boost economic activity through expanded subsidies for equipment upgrades and consumer product trade-ins, enhancing industry modernization.
- The trade-in program now includes 12 product categories, offering up to 20% subsidies, while automotive subsidies up to 15,000 yuan target vehicle scrapping and new purchases.
- Ultra-long-term special bonds and targeted relending policies aim to support these initiatives, with strict oversight to prevent market manipulation and ensure broader access for small businesses.
- China Automotive Technology & Research Center
- China Automotive Technology & Research Center predicts that over 4.1 million additional vehicle trade-ins will occur in 2025, generating more than 580 billion yuan in sales.
- People's Bank of China
- The People's Bank of China (PBOC) launched a 500 billion yuan relending program in April 2024 for key equipment upgrades, with an additional 100 billion yuan for first-time loans to tech-focused small and medium enterprises. As of the end of 2024, the PBOC had disbursed 50 billion yuan, and over 70% of upgrade loans benefited private and small enterprises, aided by simplified loan approvals and improved guarantees.
- After the central bank's interest discount subsidies：
- Actual financing costs were lowered to 1.5%.
- By the end of 2024：
- Central government nearly exhausted the 150 billion yuan allocated for consumer trade-in programs.
- By the end of 2024：
- Banks had signed loan contracts worth 800 billion yuan with businesses, with 200 billion yuan handed out for projects.
- After late 2024：
- Car sales began recovering after subsidies were increased.
- Before January 8, 2025：
- Trade-in vehicles need to be registered under the applicant's name.
- January 8, 2025：
- The National Development and Reform Commission and the Ministry of Finance issued guidelines to extend support for equipment upgrades to new sectors.
- January 8, 2025：
- Li Gang reported that more than 2.9 million vehicles were scrapped and 3.7 million new vehicles were bought through the program in the previous year.
- January 8, 2025：
- Peng Lifeng reported progress in supporting equipment upgrades.
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