The fourth meeting of the ** Financial and Economic Committee held recently emphasized that accelerating product upgrading is an important measure to promote high-quality development, and it is necessary to encourage and guide the renewal of equipment and the trade-in of consumer goods on a new scale. This deployment arrangement has become the focus of attention: what aspects are its realistic relevance, and how can it be done better?
At present, China's economy is generally showing a positive upward trend, but the impact of insufficient effective demand still exists. As an important part of effective demand, the recovery of consumption is of great significance for the economic performance throughout the year. Here, the consumption of durable goods, especially bulk durable goods, has the characteristics of high unit price and a significant proportion of total consumption, so it is one of the important starting points for stabilizing consumption and promoting consumption.
In order for a policy to achieve good results, it is necessary to explain its macro significance clearly, and also to find micro support related to the actual needs of the people. For Chinese households, although some durable goods consumption has passed the explosive growth period, there are still support points for the release of potential, that is, the demand for renewal and upgrading.
Take the household appliances and automobiles mentioned in the meeting as an example, most of the safe service life of commonly used household appliances in China is concentrated in 8-10 years. The China Household Electrical Appliances Association estimates that in 2020 alone, there will be 17.9 billion home appliances have reached the safe service life, and the market potential for replacement is huge. In particular, the current point in time has been more than 10 years since the end of the last large-scale household appliances to the countryside, and the cumulative sales at that time were 29.3 billion units have reached the stage where they need to be replaced.
At the same time, the demand for home appliance upgrades cannot be ignored. At present, home appliances are changing from "replacing their own labor" to "meeting additional needs", and the consumption scene has gradually shifted from the large scene of "buying daily necessities for the whole family" to the small scene of "buying daily necessities for personal use", and the demand for full-scene, high-quality, and platform-based products in the market is growing rapidly. According to research by IDC, China's smart home device market will reach US$87.8 billion in 2025, becoming the world's largest smart home market.
Looking at the automotive field, the State Information Center research shows that the replacement demand of the automobile market will account for about 36% of the total demand in 2022, and this proportion is expected to increase to 44% by 2024, and exceed the proportion of first-time purchase demand, which will further increase to about 48% by 2025. Such a trade-in ratio will lead to a considerable increase in car sales.
In addition, the demand for car upgrades is also gradually increasing. Studies show that China's new energy vehicle market will enter a period of comprehensive expansion and continue to maintain a vigorous development momentum, and the sales of new energy vehicles will increase to about 15 million by 2025. Among them, the number of oil vehicles for new energy vehicles will further increase. On the other hand, the demand for entertainment, diversification and ecology of on-board intelligent hardware is growing rapidly, and the demand for consumers, especially young consumers, to change cars will also increase significantly.
In general, the current promotion of consumer goods trade-in has an important role in smoothing the supply and demand cycle at the macro level, and is supported by actual demand at the micro level, which can have a positive impact on the release of consumer demand.
It should also be noted that the fourth meeting of the Financial and Economic Committee proposed that for the trade-in of consumer goods, it is necessary to adhere to the linkage between finance and local government, and coordinate and support all links of the whole chain to benefit consumers more. This highlights the difference between this consumer goods trade-in and the previous round of trade-in activities
From the perspective of actual demand, the last round of trade-in activities is in the stage of popularization of large durable goods, especially in rural areas, and this round of trade-in is in the stage of upgrading the demand for durable goods, from the pursuit of "whether there is" to "whether it is good or not", especially the pursuit of intelligence and green.
From the perspective of policy design, this round of trade-in activities has absorbed the experience of the previous round of activities, emphasizing the linkage between finance and locality, and emphasizing "overall support for all links in the whole chain". In the last round of trade-in activities, there were some problems in different links such as dismantling. For example, ** enterprises face the price limit of consumer delivery; dismantling the price of the old enterprise to collect the old; The raw materials of the enterprise are mainly ordinary residents, and invoices cannot be obtained for tax deduction; The dismantling enterprises are unevenly distributed, the coverage area is relatively small, and the cost of sending the old ones is high. These issues need to be addressed in this round of activities.
Consumption is not only the ultimate goal and driving force of production, but also the direct embodiment of the people's needs for a better life. Compared with the main role of investment in forming future production capacity, consumption, as a terminal demand, fundamentally supports the realization of economic cycle. When the consumer market is more active, the problem of total supply and demand imbalance will be alleviated, the operation of enterprises in various industrial chains will be further improved, the production cycle will be easier to achieve smoothly, and the stable and sustainable development of thousands of market players will be more guaranteed.
Taking the trade-in of consumer goods as the starting point is an important measure to promote further improvement in consumption this year. Adhere to the basic principles of market-oriented and first-class guidance, fully learn from the previous round of practical experience, further optimize the current round of policy design, fully stimulate the enthusiasm of production enterprises, platform enterprises, enterprises, dismantling enterprises and consumers, give real support to all participants, and implement the original intention of the good policy.
Author's Affiliation: Macroeconomic Research Office, Department of Economics, State Information Center).
*:Beijing**Client Author: Zou Yunhan.
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