China

CN-21:Pilot programs on remanufactured products

Policy Description

In July 2013, the National Development and Reform Commission, Ministry of Finance, Ministry of Industry and Information Technology, Ministry of Commerce, and General Administration of Quality Supervision, Inspection, and Quarantine jointly announced a pilot program on promoting remanufactured products in China. The pilot program allows purchasers of remanufactured products to return used products and purchase remanufactured products at an “exchange price”. This pilot program is one of the key activities under China’s Circular Economy Development Strategy and Near-Term Action Plan developed by the State Council in January 2013. The purpose of the pilot program is to encourage recycling of used products and to support the market development of remanufactured products. 

Description

July 2013, the National Development and Reform Commission, Ministry of Finance, Ministry of Industry and Information Technology, Ministry of Commerce, and General Administration of Quality Supervision, Inspection, and Quarantine jointly announced a pilot program on promoting remanufactured products in China. The pilot program allows purchasers of remanufactured products to return used products and purchase remanufactured products at an “exchange price”. This pilot program is one of the key activities under China’s Circular Economy Development Strategy and Near-Term Action Plan developed by the State Council in January 2013 (State Council, 2013). The purpose of the pilot program is to encourage recycling of used products and to support the market development of remanufactured products.

Under the pilot program, remanufactured products refer to products that have been recycled, then remanufactured, and have met remanufacturing requirements. Eligible remanufactured products are selected by the Chinese government through public solicitation, based on the scale of production, product quality reliability, and energy saving and material saving impacts of the products. In 2013-2014, the pilot program focused on vehicle engines and transmission gears. The program is expected to end in five years (by 2019).

Government subsidies for remanufactured products are based on the “exchange price”, which is the difference between sales price of remanufactured products and the price of recycled products. Purchasers of remanufactured products can receive a one-time subsidy. Depending on product category, details of the subsidies vary, including subsidy levels, the maximum amount of subsidies, and the number of products covered by the pilot program. In a public announcement in 2014, the government selected products (vehicle engines and transmission gears) from 10 Chinese companies and asked for public comments. For example, a total of 1,800 vehicle engines from Dongfeng Cummins Engine Co., Ltd (a 50:50 joint-venture between US and China) can receive the subsidies, with an exchange price ranging from ¥15,210 Chinese yuan to ¥39,345 Chinese yuan. The government subsidy is 10% the exchange price. The maximum subsides for vehicle engines and transmission gears are ¥2,000 and 1,000 Chinese yuan, respectively.   

The government requires remanufactured products to meet a number of requirements, such as that the quality should be certified by a third-party organization with official accreditation, the exchange price should not exceed 60% of the original new product price, and the remanufactured products need to use more than 65% of the recycled product materials (by weight) to ensure the impacts of energy-saving and material saving are achieved through remanufacturing. 

Policy Information Expand this section for information on the key features of the policy, such as its date of introduction, categorization, main objective(s) and linkages with other policies.

Policy Categorisation

Policy Instrument Type: Economic, Incentives & Subsidies

Position in the Pyramid

About Us

Participation: Mandatory

Period

Start Date: 2013

End Date: 2015

Policy Linkages

Supports Energy and Carbon Intensity Targets of the 12th Five Year Plan Effort Defining
Supports Low Carbon Development Zones Supporting Measure
Supports Promotion of the Energy Conservation and Environmental Protection Industry Supporting Measure

Agencies Responsible

National Development and Reform Commission
Ministry of Finance
Ministry of Industry and Information Technology

Primary Objective: Energy

Objective

The purpose of the pilot program is to encourage recycling of used products and support the market development of remanufactured products.

Target Group

Remanufacturing industries (especially manufacturers of vehicle parts, vehicle engines, transmission gears, and other machinery)

Driver of energy consumption or emissions affected by policy: Total energy use, total emissions, recycling rate

Implementation Information Expand this section for information on targets, monitoring, verification and enforcement regimes, and implementation requirements and tools.

Coverage

see Target Group

Quantitative Target? no

Progress Monitored? yes

Monitoring Done By

Organisation Type Organisation Name
Government Agency Local Development and Reform Commissions
Government Agency Provinial authority or municipality (*3)

Verification Required? yes

Verification Done By

Organisation Type Organisation Name
Government Agency Ministry of Finance
Government Agency General Administration of Quality Supervision, Inspection, and Quarantine (AQSIQ)
Government Agency National Development and Reform Commission
Government Agency Ministry of Industry and Information Technology

Enforced? yes

Enforcement By

Organisation Type Organisation Name
Government Agency Local finance bureaus
Government Agency Provinial authority or municipality (*3)

Requirements on the Target Group

The government requires remanufactured products to meet a number of requirements, such as that the quality should be certified by a third-party organization with official accreditation, the exchange price should not exceed 60% of the original new product price, and the remanufactured products need to use more than 65% of the recycled product materials (by weight) to ensure the impacts of energy-saving and material saving are achieved through remanufacturing. 

Support by Government

Subsidies on the price of remanufactured products (starting with the pilots on vehicle engines and transmission gears). The government subsidy is 10% the exchange price. The maximum subsides for vehicle engines and transmission gears are ¥2,000 and 1,000 Chinese yuan, respectively.   

Implementation Toolbox

Impacts, Costs & Benefits Expand this section to find information on policy effectiveness and efficiency.

Impact Quantitative Estimate Qualitative Estimate
Estimated effect on energy consumption or emissions
Estimated costs/benefits for industry
Estimated cost for government

References & Footnotes

References

[1] State Council, 2013. “Circular Economy Development Strategy and Near-Term Action Plan” (循环经济发展战略及近期行动计划), January 23. http://www.gov.cn/zwgk/2013-02/05/content_2327562.htm

[2] National Development and Reform Commission (NDRC), 2013. “Implementation Plan of Pilot Programs on Remanufactured Products” (再制造产品“以旧换再”试点实施方案), July 4. http://jjs.mof.gov.cn/zhengwuxinxi/zhengcefagui/201308/t20130826_981858.html