Recently, the National Development and Reform Commission and the Ministry of Finance issued the “Notice on Implementing Large-Scale Equipment Renewal and Consumer Goods Trade-In Policies in 2026” (hereinafter referred to as the ‘Notice’). This document clarifies the scope of support, subsidy standards, and operational requirements for the 2026 “Two New Initiatives” (large-scale equipment renewal and consumer goods trade-in) policy, marking the concrete implementation of the 2025 Central Economic Work Conference's directive to “optimize the implementation of the Two New Initiatives.”

The 2026 “Two New” policy supports large-scale equipment renewal through initiatives such as equipment upgrades, scrapping and replacement of aging commercial trucks, renewal of new energy city buses, and scrapping and replacement of outdated agricultural machinery. For consumer goods replacement, it supports automobile scrapping and renewal, vehicle trade-in and replacement, home appliance replacement, and purchases of new digital and smart products. Industry institutions estimate that the “Two New” policy could drive an average annual increase of 12 million tons in China's steel consumption, primarily boosting demand for stainless steel plates, non-oriented silicon steel, cold-rolled sheets, galvanized sheets, seamless steel pipes, and high-quality special steel bars and wires. In 2026, the continued implementation of the “Two New” policy will further drive the adjustment and optimization of steel product structures, promoting the transformation and upgrading of steel varieties toward high strength, lightweight, corrosion resistance, and extended service life.

Optimization in Three Areas

First, optimizing the scope of support. For equipment upgrades, while broadly maintaining the 2025 support scope, the 2026 “Two New” policy primarily adds three areas of upgrade subsidies: in the livelihood sector, adding elevator installations in old residential communities and equipment upgrades for elderly care facilities; in the safety sector, adding upgrades for fire rescue and inspection/testing equipment; and in consumer infrastructure, adding equipment upgrades for offline commercial facilities such as commercial complexes, shopping malls, department stores, and large supermarkets.

For consumer goods replacement, the 2026 policy concentrates resources to enhance subsidy coverage rates for key consumer products with broad reach and strong multiplier effects. Specifically: - Continues subsidies for vehicle scrappage and replacement - Maintains home appliance replacement subsidies focused on refrigerators, washing machines, TVs, air conditioners, computers, and water heaters - Expands digital product replacement subsidies to cover digital and smart products (including smartphones, tablets, smartwatches/bracelets, smart glasses, and smart home devices—including age-friendly home products) Additionally, subsidies for purchasing new digital products will be expanded to cover digital and smart products, including mobile phones, tablets, smart watches (bracelets), smart glasses, and smart home products, including age-friendly home products.

Second, subsidy standards will be optimized. For equipment upgrades, the 2026 “Two New” policy will adjust subsidies for replacing old residential elevators from a fixed amount to tiered, differentiated subsidies based on the number of floors (stops) per elevator. For scrappage and replacement subsidies of old commercial trucks, priority support will be given to replacing them with electric trucks. For consumer goods trade-ins, the 2026 “Two New” policy maintains the upper limit for automobile subsidies while adjusting the fixed subsidy to a percentage-based subsidy relative to the vehicle price. For home appliance trade-ins, the subsidy will be adjusted to cover products with Grade 1 energy efficiency or water efficiency, subsidizing 15% of the product's price with a single-item subsidy cap of 1,500 yuan. Subsidy standards for digital and smart products will remain unchanged from previous digital product standards.

Third, optimize implementation mechanisms. For equipment upgrades, the 2026 “Two New” policy will streamline project application mechanisms and review processes, further lowering investment thresholds for eligible projects to enhance support for small and medium-sized enterprises and broaden policy coverage. For consumer goods trade-ins, the 2026 “Two New” policy will refine funding allocation methods, improve full-chain implementation rules, and strictly crack down on illegal activities. Concurrently, to implement the national unified market requirements, uniform subsidy standards will be enforced nationwide for vehicle scrappage and replacement, vehicle trade-ins, trade-ins of six categories of home appliances, and purchases of four categories of digital and smart products.

Improving Policy Implementation Mechanisms

First, optimize funding allocation methods. Building upon existing allocation standards, reasonably determine regional funding scales by comprehensively considering factors such as prior policy execution outcomes and audit findings. Regions with significant payment delays will face intensified oversight and penalties through appropriate measures.

Second, ensure balanced and orderly fund utilization. At the national level, maintain a reasonable work pace by disbursing funds in quarterly batches. At the local level, guidance will be provided to ensure balanced and orderly expenditure of subsidy funds, ensuring smooth transitions across weeks, months, and quarters. Furthermore, local governments are required to establish a pre-allocation system for subsidy funds to alleviate the financial burden of advance payments on enterprises.

Third, crack down on illegal activities and enforce strict regulatory oversight. Special campaigns will be organized to investigate, penalize, and expose every instance of illegal or non-compliant behavior. Concurrently, coordination between administrative law enforcement and criminal justice will be strengthened to ensure timely legal accountability.

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