Shanghai’s economic stimulus package that promotes large-scale equipment renewals and consumer goods trade-ins has helped boost investment growth and unlock consumption potential. In March, the central government launched a plan to promote large-scale equipment upgrades and old-for-new exchanges of consumer goods. This was followed by a measure in July where the government allocated around CNY300 billion in long-term special government bonds to support these initiatives. Shanghai introduced a four-year action plan (2024-27) in April to promote equipment renewal in 10 sectors. These include energy, construction, traffic and manufacturing, as well as four types of consumer goods trade-ins, including home appliances, vehicles and home decoration to support the national initiatives. In September, the city released a series of measures aimed at intensifying support for the trade-in programs.
According to the Shanghai Commission of Commerce, with an incentive policy encouraging the trade-in of old vehicles for new ones, the city received more than 100,000 applications to scrap vehicles and replace them by November 28, generating more than CNY20 billion in new vehicle sales revenue. The consumption market in Shanghai has remained stable and is displaying signs of recovery. Total retail sales of consumer goods increased by 10.9% year-on-year in October, a significant turnaround compared to the 4.3% year-on-year decrease in September.
Shanghai Rinnai, established in 1993 as a Sino-foreign joint venture, has experienced rapid growth in the last 30 years. It has been leading industry innovation and is a pioneer in bringing the latest technologies to consumers. According to Jiang Ying, Chief Operating Officer (COO) at Shanghai Rinnai, the challenges in China’s property market have led to decreased demand for kitchen appliance businesses including Rinnai. “We had already come to terms with these results this year. However, with the aid of trade-in policies and additional benefits from e-commerce platforms, our sales figures during the Double 11 shopping festival exceeded our expectations,” Jiang said. “I believe this success is not solely attributed to Rinnai’s craftsmanship and dedication but also significantly aided by the robust support to promote the replacement of home appliances,” he added. Jiang said that the benefits of supportive policies extend beyond mere sales growth. They also enhance brand awareness among consumers and encourage brands to upgrade and develop products with a focus on sustainability, energy efficiency and smart technology. “These efforts further bolster business competitiveness,” he said. “With the government subsidies, we not only achieved significant demand for popular products such as gas water heaters and wall-mounted boilers but also experienced an increase in sales for heat pumps, kitchen equipment and home appliances.” Rinnai's new flagship experience center in Xuhui district showcases the company's latest products such as kitchen appliances, water heaters, heating systems, water purification and heat pump systems.
The implementation of equipment renewal plans in Shanghai also covered elevators used in high-rise buildings, which created new demand in the market. In the early 1990s, the first batch of commercial residential buildings were equipped with lifts in Shanghai. By the end of 2023, a total of 325,653 elevators were operational in Shanghai, ranking the city first globally. Among these, more than 154,519 elevators had been installed in residential buildings, according to a report on elevator safety released by the Shanghai Administration for Market Regulation in May. The report also highlighted that the issue of “aging elevators” needs to be addressed. In Shanghai’s residential buildings, more than 46,000 elevators have been in operation for more than 15 years, and nearly 19,000 had been in use for more than 20 years. To tackle aging elevators, Shanghai has been promoting the replacement or upgrading of elevators in the city by offering subsidies. The replacement subsidy for an elevator in residential buildings that has been in operation for more than 15 years was raised to CNY150,000 this year, while the upgrade subsidy stands at CNY50,000 each.
Marohn TK Elevator, formerly known as Marohn ThyssenKrupp Elevator, has been assisting in elevator replacements in Shanghai with its innovative and high-quality products and services. According to Lu Yaning, CEO of Marohn TK Elevator, moving forward with replacement or upgrade plans for old lifts in some residential communities can face challenges. These include difficulties in raising funds, a lack of consensus among residents, particularly from those on lower floors, as well as issues related to equipment management and maintenance. The company said that the government policies regarding lift replacements have helped boost elevator sales, enhanced brand awareness, expanded its market reach and fostered partnership development. “The government’s subsidies will significantly reduce costs for property owners, making elevator renewal plans more appealing to a wider audience,” Lu said, as reported by the China Daily.
