Recently, "two new" has become a hot topic in China's economic relations. From last year's Central Economic Work Conference proposing to promote large-scale equipment upgrades and consumer goods trade in, to this year's successive policy push, a wave of "two new" trends is taking shape. Why does the country have to put in so much effort to do this, and what opportunities will the "two new" bring to individuals? With these questions in mind, Tan Zhu had a chat with the professionals involved in the formulation of this policy. Not long ago, the National Development and Reform Commission took new actions in response to the "two new" policies. The newly launched document is called "Several Measures for Strengthening Support for Large scale Equipment Updates and Consumer Goods Trade in". The focus of this document is on the word 'strengthening' - previously done well, now we need to strengthen our efforts. Looking back at the first half of the year, this work has been carried out intensively. The fourth meeting of the Central Financial and Economic Commission in February this year emphasized the promotion of a new round of large-scale equipment updates and the trade in of consumer goods. On March 13th, the State Council issued the "Action Plan for Promoting Large scale Equipment Renewal and Consumer Goods Trade in". On July 19th, the executive meeting of the State Council was held to study measures to strengthen support for large-scale equipment updates and the policy of exchanging old for new consumer goods. In fact, these measures are aimed at addressing the issue of insufficient effective demand. This issue has also been a focus of discussion in the public opinion and research institutions in the past period. The policies related to the "two new" were introduced during this discussion and expectation. For these measures, research institutions have also made a lot of interpretations - they believe that household appliances such as air conditioners, refrigerators, and televisions, as well as industries such as automobiles, will be beneficiaries of these measures. How are the updates and replacements in these industries targeted to address domestic demand issues? To answer this question, one must truly understand the connotation of "two new". This is not the first time our country has implemented similar measures, why bring it up again at this time? We need to consider it in conjunction with our development stage. Zhang Yuyan, a member of the Chinese Academy of Social Sciences, once mentioned that the potential for economic growth can be explored from two perspectives: expanding the increment and revitalizing the stock. Incremental growth is mostly brought about by new technologies, such as the emergence of artificial intelligence technology, combined with various application scenarios, which will open up a certain market size and bring economic benefits. As for the stock, professionals told Tan that after more than 40 years of reform and opening up, China has ranked first in the world in terms of equipment ownership, and many existing assets are gradually entering the scrap period. These replacement needs have already occupied half of domestic demand. With the continuous promotion of new urbanization, these existing assets will continue to increase, and the demand for upgrading and replacement will become greater and greater. What is the potential of these stocks? Let's take cars as an example. In the United States, there are over 800 cars per thousand people, resulting in a total car ownership of 283 million. At present, China has 238 cars per thousand people, almost a quarter of the number in the United States, while China's car ownership is 336 million, 1.2 times that of the United States. That is to say, the market size created by the upgrading and replacement of large consumer goods such as automobiles is very rare worldwide. Not to mention, in addition to these consumer goods, there are also production end machines, equipment, and so on. According to data from the National Development and Reform Commission, the investment in equipment in key fields such as industry and agriculture is expected to reach approximately 4.9 trillion yuan in 2023. As the demand for equipment updates continues to expand, this will be a huge market with an annual scale of over 5 trillion yuan. So, upgrading is a means of transforming China's existing economic advantages. The investment in equipment updates and large-scale consumption are the enormous energy driving domestic demand. The market and potential are here, so how can we transform potential into tangible consumption and investment? The Several Measures mentioned that the state will allocate about 300 billion yuan of ultra long term special treasury bond funds to strengthen support for the implementation of the "two new". For equipment updates, nearly 150 billion yuan will be allocated for equipment updates in industries such as industry, environmental infrastructure, transportation, logistics, education, cultural tourism, healthcare, energy and power, and old elevators. In terms of trade in of consumer goods, we will directly arrange extra long term special treasury bond funds to support local governments to independently improve their ability to trade in consumer goods. We will focus on supporting the scrapping and renewal of automobiles and the replacement and renewal of personal consumers' passenger cars, the trade in of household appliances and electric bicycles, the purchase of goods and materials for partial renovation of old houses, kitchens and bathrooms, and the aging of homes, and promote smart home consumption. Seeing this, some people may ask, besides the changes in the old and new of these devices, what else has changed? If we just replace the old with the new, is this' revitalizing the stock '? To find such changes, we can focus on the three words mentioned in the "two new" policies - high-end, intelligent, and green. These words are not only in line with the upgrading needs of ordinary people's consumption, but also the direction of China's manufacturing transformation and the rightful meaning of green, low-carbon, and high-quality development. In the 'Several Measures', there are many details that reflect this transformation direction, such as accelerating the upgrading of old ships with high energy consumption and emissions to new energy and clean energy ships; Increase subsidies for household appliances with Level 1 energy efficiency. How did the newly introduced policies adapt to the situation? Yang Shaopeng from the National Energy Conservation Center recently conducted research on the "Two New" policies. He chose to research companies related to cold storage. Data shows that the electricity consumption for refrigeration in China accounts for over 15% of the total electricity consumption in the society, with an average annual growth rate of nearly 20%. Promoting the green and low-carbon transformation of the refrigeration industry is an important measure for us to address climate change and achieve the "dual carbon" goal. But as for cold storage, industry data shows that the proportion of old production capacity in China's cold storage is relatively high, and the task of upgrading and renovating in the future is arduous. Yang Shaopeng told Tan that many cold storage facilities in China were built more than ten years ago, and the electricity consumption of these old cold storage facilities is very high. If more efficient refrigeration equipment is used, electricity consumption can be saved by more than one-third. The country also has overall arrangements for the use of more efficient refrigeration equipment. In February last year, the Environmental Resources Department of the National Development and Reform Commission put forward guidance on the upgrading and transformation of key product equipment. It was mentioned that by 2025, high-efficiency and energy-saving products should account for 40% and 60% of commercial and household refrigeration equipment. The Environmental Resources Department is also responsible for formulating and leading the implementation of the "two new" policies. The continuity of this planning arrangement not only provides directional guidance for green and low-carbon transformation, but also provides targeted support for green and low-carbon transformation. But the problem is that for enterprises, the current investment return cycle for building a new cold storage may take three to four years. Yang Shaopeng found in his research that some companies do not consider projects with investment return cycles exceeding four years at all. In fact, enterprises have a need for "replacement" - as electricity consumption decreases, the cost of the enterprise decreases, and the profit of the enterprise increases. At the same time, this will reduce the cost of cold chain transportation and also lower logistics costs. But for enterprises, a long return cycle is equivalent to a 'second entrepreneurship'. Many companies are unwilling to take such risks. When enterprises encounter difficulties, the government can lend a helping hand. Yang Shaopeng calculated an account for Mr. Tan: from the perspective of enterprises, in addition to applying for 148 billion yuan of ultra long term special treasury bond equipment renewal fund support, enterprises participating in equipment renewal can also obtain policy support from at least two other aspects: financial policies such as equipment renewal and re lending, and tax relief. These policies can help businesses reduce their "replacement" costs by 20%. Converted, the "two new" policy will shorten the investment return cycle by one year, allowing companies to arrange funds more easily. That is to say, the expenditure of 300 billion yuan is not just about old machines becoming new machines, but also about outdated and high emission old machines becoming intelligent and green new machines. This quality upgrade is conducive to the improvement of total factor productivity and can also transform stock into quality, achieving the effect of "revitalization". From this perspective, the "two new" policy is not only in response to the needs of enterprises and consumers, but its greater role is like using a small ball to drive a big ball, guiding the Chinese economy towards high-quality development. Wen Hua, Deputy Director of the Environmental Resources Department of the National Development and Reform Commission, told Tan that the newly introduced policy of strengthening support for the "two new" initiatives is strong, practical, targeted, and of high value. It is not only beneficial for the present, but also for the long term. It can effectively unleash the potential of domestic demand, promote investment and consumption, achieve energy conservation and carbon reduction, cultivate and strengthen advanced production capacity, help the comprehensive green transformation of economic and social development, and promote high-quality development. After explaining the purpose of this 300 billion yuan, I believe many people still have some confusion - indeed, some production equipment and consumer goods need to be updated. But the update cycle of these things can be as short as seven or eight years, often more than ten years. That is to say, if we replace them this time, the next time we replace them may be more than ten years later. Does this mean that the 'two new' policy is a 'one-time' policy and not sustainable? Reorganizing the documents related to "two new" can answer this question. Tan Zhu found that the document particularly emphasized the "recycling" process. This recycling includes not only scrap recycling, but also 'second-hand' recycling. Based on our life experience, recycling is not a simple task, it requires optimizing configuration and fully utilizing resources. Of course, not all old items are necessarily scrapped. Many of these "old" items have entered the second-hand market for secondary or even multiple transactions. Nowadays, the 'second-hand market' is thriving. According to an authoritative report in the industry, the size of the domestic second-hand consumer market has exceeded one trillion yuan in 2020; It is expected that by 2025, the transaction volume of idle goods in China is expected to exceed 3 trillion yuan. However, due to the lack of transparency in information and information asymmetry between buyers and sellers, there have been many disputes and controversies in second-hand transactions. How to solve this problem? In fact, a direction has been clearly defined in the "two new" policies. Taking the automotive industry as an example, the plan proposed in March this year aims to promote the construction of a full lifecycle management information exchange system for automobiles. As the name suggests, this system is used to manage the entire lifecycle of a car, connecting all information from production, sales, use, used car transactions, to scrapping and recycling. With this system, second-hand car trading is like having "origin" food, with first-hand information for product traceability, consumers can grasp all the information from the factory to the use of this product. The transparency of information also means a further improvement in the circulation attributes of goods. A few days ago, the relevant person in charge of the commerce department in Chengdu, Sichuan introduced that if a consumer sees a desired car online, but the vehicle is in the Shenzhen showroom, the consumer can complete the pickup in Chengdu through mutual adjustment services. The cross provincial circulation of second-hand cars is essentially a microcosm of building a unified national market. That is to say, the "two new" policies can accelerate the circulation of goods, which will first drive the development of a group of related service industries. Subsequently, it will further break through market bottlenecks and bottlenecks, optimizing the economic cycle. Chen Wenling, Chief Economist of the China International Economic Exchange Center, regards this "home current" and "car current" as national