On June 25th, four departments including the Ministry of Finance, the National Development and Reform Commission, the People's Bank of China, and the State Administration of Financial Supervision and Administration issued a notice on the implementation of the financial subsidy policy for equipment renewal loans (hereinafter referred to as the "notice"), which stipulated the relevant matters of the central government working together with relevant parties to implement the financial subsidy policy for equipment renewal loans. The Notice clarifies that if the operating entity implements equipment renewal actions in accordance with the Notice of the State Council on Issuing the Action Plan for Promoting Large scale Equipment Renewal and Consumer Goods Exchange (Guofa [2024] No. 7), and includes them in the list of alternative projects determined by relevant departments, and the loans issued by banks to them receive support from the People's Bank of China for equipment renewal related refinancing, the central government will provide interest subsidies to the bank loans of the operating entity. The notice also mentioned that if the loans issued by banks to operating entities meet the conditions for re loan reimbursement, the central government will subsidize the principal of bank loans to operating entities by 1 percentage point. Interest will be subsidized from the date of transfer of relevant loan funds to the supplier's account, with a subsidy period not exceeding 2 years. "The 'Notice' issued by the Ministry of Finance and other departments this time is of great significance for promoting large-scale equipment updates and exchanging old for new consumer goods." Yuan Shuai, Executive Vice President of the Agricultural, Cultural and Tourism Industry Revitalization Research Institute of the China Urban Development Research Institute, stated in an interview with Securities Daily that the notice has reduced the financing cost of enterprises updating equipment through financial interest subsidies, thereby encouraging them to actively participate in equipment updates and consumer goods trade in activities. Fiscal and financial support are important policy guarantees for promoting large-scale equipment upgrades and exchanging old for new consumer goods. The Action Plan for Promoting Large scale Equipment Renewal and Consumer Goods Exchange issued by the State Council in March this year proposed to "optimize financial support. Use re lending policy tools to guide financial institutions to strengthen support for equipment renewal and technological transformation; the central government will provide certain interest subsidy support to bank loans that meet the conditions for re lending reimbursement.". Zhou Maohua, a macro researcher at the Financial Market Department of Everbright Bank, told Securities Daily that the notice guides financial institutions to increase support for equipment updates and consumer goods trade ins, which helps to enhance the service enthusiasm of financial institutions and effectively reduce the financing costs of the real economy. It is worth noting that the Notice has made clear provisions on the supervision and management of financial interest subsidy funds related to equipment renewal loans from the aspects of ensuring dedicated use of funds, consolidating responsibilities of all parties, strengthening fund management, and strict accountability. Yu Xiaoming, Senior Investment Advisor at Jufeng Investment Consulting, analyzed in an interview with Securities Daily that during the implementation of the Notice, companies need to ensure that loans are used for designated projects, banks need to strictly approve and regulate loans, and the government needs to strengthen project and fund supervision to ensure transparency and efficiency. Violations must be dealt with seriously by law to ensure accurate and effective use of funds, thereby effectively promoting equipment and technological updates. When talking about how to make the financial discount interest policy of equipment renewal loan play a better role, Zhou Maohua said that cooperation between financial departments and financial departments can be strengthened, and policy publicity can be strengthened. For financial institutions, it is necessary to optimize service processes, establish clear application conditions and approval processes, strengthen post loan management, and timely evaluate the use of loan funds. "During the implementation of the 'Notice', attention should be paid to risk prevention." Yuan Shuai stated that financial institutions should strengthen risk assessment and review of loan projects, and enterprises should also enhance risk awareness, plan and use loan funds reasonably. In addition, it is necessary to strengthen information sharing and collaboration among the government, financial institutions, and enterprises to improve the efficiency and effectiveness of policy implementation. Relevant training can also be organized to help enterprises and financial institutions better understand and apply policies. (Lai Xin She)