Efforts to promote large-scale equipment upgrades, consumer goods trade-ins continue to pay off

China's policies to encourage large-scale equipment upgrades and consumer goods trade-ins have kept yielding positive results in the first quarter of this year, leading to improved factory efficiency, increased sales, and broadened market reach.

From January to March, driven by measures to promote factory equipment upgrades, the amount of newmachinery and equipment purchased by enterprises across the country increased by 11 percent year on year, data from the State Taxation Administration (STA) showed. 

The equipment renewal and intelligent transformation have also brought new momentum to the development of enterprises. 

In east China's Zhuji City, dubbed as "the sock capital", Zhejiang Yiheng Textile Technology Co., Ltd. has boosted productivity by 30 percent with its new digital factory, which houses over 300 upgraded automatic sock manufacturing machines. The entire process, from knitting to shaping to packaging, has been automated.

"We've upgraded all our production equipment to intelligent, all-in-one sock machines that handle knitting, sewing, and inspection. This has improved both our production efficiency and product quality. Our products are now sold in over ten countries and regions, including the United States, Germany, and the Netherlands. In the first quarter of this year, our exports surpassed 10 million U.S. dollars, up 17.5 percent year on year," said Han Yangling, director of the company.  

In the first three months of the year, sock businesses in Zhuji saw a sales revenue of 2.71 billion yuan (about 369 million U.S. dollars), increasing by 12.5 percent compared to the same period of last year.

Additionally, the tax department in Zhuji has improved the tax process and made export tax rebates more efficient for local sock companies, helping them better expand into overseas markets.

"The entire export tax rebate process has been improved to eliminate paperwork, with processing times now reduced to within three working days. In the first quarter of this year, over 300 sock companies benefited from export tax rebates or exemptions, totaling more than 400 million yuan (about 54 million U.S. dollars)," said Ding Jianzhong, director of Zhuji Tax Bureau. 

In addition to equipment upgrades, policies to boost consumer goods trade-ins have also continued to pay off, driving higher sales, particularly in sectors of home appliances, furniture, and communication devices.

In the first quarter, retail sales of household audio-visual equipment like televisions and appliances like refrigerators grew by 29.3 percent and 38.4 percent year on year, respectively. Retail sales of furniture increased by 15.9 percent, while mobile phones and other communication devices saw a 27.3 percent rise year on year.

Efforts to promote large-scale equipment upgrades, consumer goods trade-ins continue to pay off

Small- and medium-sized retailers across the United States "are getting hit the hardest" by disrupted supply chains, as U.S. tariff actions fuel market chaos and panic, a U.S. logistics industry insider based in China warned.

Sam Boyd, managing partner at Guided Imports -- a cross-border logistics company serving many American small businesses that rely on Chinese manufacturing -- told China Media Group (CMG) that the tariff policies introduced by the Trump administration have left many importers unsure about how to respond.

"Small- to medium-sized retailers and e-commerce companies, who are usually purchasing their goods close to when they're going out of stock, are getting hit the hardest. It's difficult for businesses to really understand what to do, so most of the businesses are just being forced to wait. And what they've learned over the last two-week period is that these escalations have no ceiling. The majority of our customers have opted to pause their shipments leaving from China. And the downside with this is that they're going to go out of stock," said Boyd.

According to the National Retail Federation (NRF), container imports to the U.S. are expected to fall by more than 20 percent year over year in the second half of 2025.

Boyd warned that the consequences of paused shipments could extend beyond inventory shortfalls, creating ripple effects that threaten port operations and U.S. domestic logistics.

"But there's an even more significant ripple effect that we're not quite aware of, which is: because so many businesses have chosen to pause their shipments and wait, we're creating a backup -- or a future backup -- that's going to be seen at U.S. ports. So let's say that there is going to be an event that solves this tariffs issue, and it's to everyone's liking enough that they can start placing orders again. By the time they all [those shipments] start arriving at the ports, it's going to create a surge. And this is going to create a surge in shipping costs, and it is going to create a surge in trucking within the U.S.," he said.

Boyd also questioned the U.S. government's repeated calls to bring manufacturing back home, arguing that such efforts are far from realistic given China's deep industrial capacity.

"The concept of reassuring is a very nice concept for those who are many degrees away from manufacturing. But China has so much experience with manufacturing that for any country -- whether it be the United States or one of China's neighbors that try to take over -- it's not going to be something that we can just flip a switch and all of a sudden, you know, a new country becomes the manufacturer," said Boyd.

Small-, medium-sized retailers "hit hardest" by U.S. tariff policy: logistics expert