Large-scale equipment updates are steadily advancing, and enterprises have benefited significantly

Progressing Steadily with Large-Scale Equipment Upgrades

In recent years, as China accelerates its industrial upgrade, the demand for new equipment from enterprises has been on the rise. Large-scale equipment upgrades not only meet the developmental needs of businesses but also facilitate high-quality industrial growth. Earlier this year, the State Council approved the “Action Plan for Promoting Large-Scale Equipment Upgrades and Consumer Product Replacements,” followed by various local governments implementing related initiatives to ensure that the policies benefit a wide range of companies.

Rapid Policy Implementation

Recently, the Jiangxi Provincial Department of Transportation, along with ten other departments, launched the “Action Plan for Large-Scale Equipment Upgrades in the Transportation Sector.” This initiative focuses on three key areas: urban new-energy buses, outdated operational trucks, and aging operational vessels. The plan includes actions such as replacing city passenger vehicles with electric ones, phasing out outdated diesel trucks, scrapping old vessels, replacing outdated postal and delivery equipment, upgrading logistics facilities, and advancing the digital transformation of infrastructure.

“The introduction of subsidy policies has greatly helped public transport companies by reducing vehicle and energy costs, and improving equipment efficiency,” said Fu Shengshu, Deputy Director of the Machinery Division at Nanchang Public Transport Group. “The subsidies for new vehicle updates lower the purchase costs, while updating the power batteries significantly saves on energy expenses.”

In accordance with the “Implementation Plan for Promoting Large-Scale Equipment Upgrades and Consumer Product Replacements” released in May, Sichuan Province has identified four major actions to drive these upgrades. The plan outlines seven supporting policies related to finance, taxation, innovation, and more, listing 50 key initiatives. Recently, Sichuan rolled out “Further Policies to Support Large-Scale Equipment Upgrades and Consumer Product Replacements,” committing to invest 3 billion yuan annually from July 24, 2024, to December 31, 2027, to support projects related to equipment upgrades, green and low-carbon transformations, and technological innovations in the industrial sector.

This year, Ningxia has started four major actions: equipment upgrades, consumer product replacements, recycling, and standard enhancements, releasing 25 implementation plans and supporting policies. As a result, they have completed the upgrade of 21,500 units of equipment, scrapped and replaced 14,100 agricultural machines, and purchased over 32,000 teaching and research instruments from January to August. Ningxia’s investment in industrial tech upgrades has increased by 14.2% year-over-year, driving significant growth in investments.

Focusing on Key Areas

“The industrial sector is the primary demand side for equipment upgrades and an important supply side for recycling and resource utilization,” explained Zeng Jiming, Deputy Director of Sichuan’s Economic and Information Technology Department. With a total industrial asset worth nearly 7 trillion yuan, the annual investment demand for equipment upgrades exceeds 250 billion yuan, indicating vast potential for growth in this area. As of now, Sichuan has over 4,000 planned projects in industrial equipment upgrades with a total investment exceeding 960 billion yuan, supporting robust industrial investment growth. From January to July this year, Sichuan’s industrial investment and technology upgrade investments grew by 13.9% and 9%, respectively, with equipment investment rising 7.3%.

In response to the new wave of equipment upgrades and consumer product replacements, local governments in Sichuan are accelerating the implementation of support measures. The Chengdu High-tech Zone aims to achieve 7.6 billion yuan in equipment upgrade investments this year. “We are determined to secure the first batch of Sichuan’s industrial technology upgrade pilot projects, driving key industry chain businesses to implement upgrades and the technological transformation of equipment,” said Wang Feng, Director of the Economic and Information Department of Chengdu High-tech Zone.

Wu Qingfu, Vice President of Chengdu Feisite Technology Co., Ltd., a nationally recognized “specialized, refined, and innovative” small giant enterprise, noted that the company’s funding for equipment upgrades and digital transformation comes from both self-financing and government support, including major sci-tech projects from Sichuan Province.

Ningxia has expanded its support for equipment upgrades in various sectors, now including energy, old elevators, and critical industries focusing on energy conservation and safety retrofits. Jiang Zhewen, Deputy Director of the Ningxia Development and Reform Commission, indicated that the province has incorporated agricultural machinery such as harvesters and milking machines into the upgrade subsidy program. This aims to enhance the modernization of its agriculture sector.

Financial support and oversight are crucial to promoting these initiatives effectively. Zhu Jian, Deputy Director of the Ningxia Financial Department, highlighted the importance of securing state loan interest subsidies based on approved equipment upgrade projects while coordinating with ecological and environmental bodies to obtain specific funding for recycling e-waste.

Additionally, Ningxia has lowered the application threshold for projects, eliminating the requirement for a total investment of over 100 million yuan for equipment upgrade applications. Company representatives expressed hope for the swift rollout of the upgrade policies so that enterprises can fully benefit from the financial incentives. The province is also streamlining project application processes, improving efficiency in securing funding. Since the implementation of the new measures, Ningxia has sought 2.378 billion yuan in federal support for 73 upgrade projects.

As an old industrial city, Shizuishan City in Ningxia is focusing on the transformation of key industries like chemical, metallurgy, and coal to enhance innovation, equipment upgrades, and overall modernization to seize opportunities for large-scale equipment upgrades.

Clear Benefits for Enterprises

“A number of our equipment upgrade projects have been included in Sichuan’s first batch of ‘Equipment Upgrade Loans.’ We are currently communicating with financial institutions for credit approvals, and we are also actively applying to get additional projects into the provincial upgrade and technology transformation database to secure more funding,” said Yao Zhe, Public Affairs Director of Chengdu Yousainuo Biotechnology Co., Ltd. He believes that Sichuan’s increased support for industrial equipment upgrades this year will have significant financial benefits for businesses.

Kangnuoya Pharmaceutical Technology Co., Ltd., is also taking advantage of the policy to promote equipment upgrades. “The introduction of these policies has boosted our confidence in upgrading equipment and technological transformations. We are implementing smarter and more efficient operations throughout our processes,” shared Vice President Wu Hongtao.

Ma Xinghua, Chairman of Jiujiang Zhenxin Shipping Co., Ltd. in Jiangxi, is closely monitoring the implementation of local policies and plans to follow the timeline for equipment upgrades. “We plan to decommission four old vessels and build two new energy vessels. Once completed, these new ships will enhance transport efficiency and reduce maintenance costs while improving overall safety.”

Liao Xiaofeng, Director of the Planning Department at the Jiangxi Provincial Department of Transportation, emphasized that the large-scale equipment upgrades in the road and water industries not only stimulate innovation and product upgrades in transportation equipment but also promote clean energy solutions and infrastructure development. Moving forward, the department will work alongside local transportation authorities to ensure efficient approval processes and timely disbursements of subsidies.