April 25 2024

China, Financial aid backs equipment renewal and trading-in of consumer goods

China is offering "strong" financial support to promote the large-scale renewal of equipment and the trade-in of consumer goods, and fiscal support from the central government will focus on key areas like new energy vehicles.

On April 24, 2024, several ministries launched detailed implementation plans for financial subsidy to the trading-in of old cars, up to December 31, 2024, a one-time quota subsidy will be given to individual consumers who scrap high-emissions passenger cars or purchase new energy cars that meet energy-saving requirements as follows:

  • to scrap national III and below emission standard fuel passenger vehicles
  • to scarp new energy passenger vehicles registered before April 30, 2018,
  • to purchase new energy passenger cars that are included in the "New Energy Vehicle Model Catalogue of Vehicle Purchase Tax Reduction and Exemption", or
  • to purchase fuel passenger cars with displacement of 2.0 litres and below

For scrapping the above two categories of old cars and buying new energy passenger cars, a subsidy of 10,000 yuan; for those who scrap national III and below emission standard fuel passenger cars and buy 2.0 litres and below emission fuel passenger cars, a subsidy of 7,000 yuan.

The detailed plans were issued in order to implement the spirit of the Action Plan for Promoting Large-scale Equipment Renewal and Replacing Old Consumer Goods with New Ones announced by the State Council in March (Guo Fa (2024) No.7), with the target that as of 2027, the recycling volume of scrap vehicles is expected to roughly double from 2023, and used car transactions will increase by 45 percent.

According to the Action Plan, detail preferential tax support will be offered for equipment renewal and technological transformation in the industrial sector, such as special equipment for energy conservation, water conservation, environmental protection, and production safety, and particularly digital and intelligent transformation.

Diacron will keep an eye on any further developments and update you accordingly.

You may click below link for the Action Plan and detail plans: