A brand new national policy encourages consumers to turn in their old appliances for energy-efficient models for a 10 percent discount up to 400 yuan (US$59), plus certified recycling.

The discount goes up to 1,000 yuan on some air-conditioners in Shanghai, thanks to a municipal policy.

Whether that, along with so-far cumbersome procedures, is enough to get people spending remains to be seen.

The state-subsidized "old-for-new" program also provides approved recycling by certified recyclers - not the guys who take only valuable metals and junk the rest, including pollutants.

The policy announced by the State Council went into effect on July 1 and runs through May 31, 2010.

It is underway on a trial basis in Shanghai, Beijing, Tianjin and six other cities.

The State Council is spending 2 billion yuan in subsidies to domestic manufacturers - to grant 10 percent discounts.

Given the economic slowdown and China's push to get consumers spending, this could be a good time for better-than-usual bargains.

It's too soon to say, however, whether the discount will be sufficient enticement to get consumers to part with their cash when money is tight.

Discount procedures are being worked out and already some buyers complain that they are cumbersome and the discount/refund isn't sizable.

Consumers can receive a 10 percent refund on the purchase price of selected brands when they turn in their old appliance. The maximum discount is 400 yuan.

The plan covers five appliances: TV, 400 yuan maximum discount; refrigerator, 300 yuan; washing machine, 250 yuan; air-conditioner, 350 yuan; and computer, 400 yuan.

Shanghai is providing additional subsidies but details were not available.

Ma Yuexi wants to replace her eight-year-old television with a new flat-screen model and she has been comparing prices at major appliance retailers.

She is also calculating how much discount she can get under a new national "old-for-new" program encouraging consumers and businesses to turn in their old appliances and vehicles for new, more energy-efficient models.

"I have wanted to get a better TV for a long time, but I don't like to throw away the old one since it still works," says Ma, 51. "The new policy tempts me to buy."

There's a big demand in cities like Shanghai for new appliances since many have been overused for 10 or 20 years, says Li Fuchun, secretary general of Shanghai Household Electrical Appliance Dealers Assn.

"It's time for an upgrade," he says, observing that many appliances were purchased in 2000-2002 and are past their replacement time.

Aging and inefficient appliances are common in the city, especially air-conditioners, refrigerators and water heaters.

The association estimates that there are 1.2-1.5 million water heaters over eight years old, 700,000-1 million air-conditioners, and 1.1-1.5 million refrigerators of that age.

"The new policy will not only help boost consumption, but also encourage replacement of low-efficiency products with new ones that are more energy-efficient and less polluting," says Li.

Older appliances usually use 20-30 percent more energy than newer models with better technology.

Old appliances also can be dangerous if the electrical wiring is worn out and if they leak gas. Old washing machines and refrigerators can harbor germs.

About 60 percent of the purchases these days involve upgrading, according to a customer survey in March, says spokesman Yao Zhengyuan of Suning, a major domestic appliance retailer.

In March Suning started to subsidize turned-in gas appliances (mostly water heaters) and in April expanded the program to cover air-conditioners, refrigerators and microwave ovens.

Sales of gas appliances have increased to around 300 a day, says Yao, who gave no comparison. Sales of other appliances also increased.

Under the national turn-in policy customers can get a "trade old for new" certificate by turning in their old appliance. When presenting the certificate and their identity card, they can get a discount when buying a new appliance, mostly domestic brands. For example, you can turn in an old refrigerator and get a discount on a new water heater.

Yao says that customers should first apply for the "trade old for new" card at the service desk when purchasing at Suning. They will get two cards, one for a discount on a new appliance, the other for payment for the old appliance. They get cash for the old appliance when the delivery man installs the new appliance and takes away the old one.

If an appliance is already on sale, customers still get the national and Shanghai city discounts.

That's too much involved for many customers including 32-year-old Jiang Yun who also wants a new TV.

"It is much more complicated than it used to be," says Jiang. "I upgraded my air-conditioner two years ago. There wasn't a two-step process then. I just paid the purchase price and got the discount/refund when the old appliance was collected. You didn't have to apply for anything."

Properly recycling the old appliances is essential for environment protection and that's an important part of the program, says Chen Xuexin, secretary general of Shanghai Waste Materials Recycling Assn.

Though many appliance markets already give discounts and collect old appliances, many of the appliances are not properly recycled.

"Most markets are only go-betweens. They hire recycling individuals or small companies to deliver the new machines, letting them scrap the old ones for their own profit," says Chen.

The new national program provides a transport subsidy to enterprises that send old appliances promptly to appointed recycling companies. There are only one or two approved recyclers in each trial area.

The numerous non-approved recyclers cannot take part in the national "old-for-new" program.

Many unapproved recyclers only extract valuable metals, as from computers, and sell the other metal for scrap. They junk the rest, including plastics and polluting chemicals.

This may help regulate the appliance recycling business and reduce pollution, according to Chen.

Many consumers choose to wait and see, as the price is still not low enough for many of them. Some say they could get a better deal in former promotions.

Ma Yuexi is still window-shopping for her TV. Greener wheels

The new national "old-for-new" program also encourages drivers to trade in older vehicles and shift to more fuel-efficient autos and trucks.

For those who qualify, the purchase tax on the new vehicle is, in effect, waived. Those who qualify in the trade-in plan receive compensation equal to the purchase tax on the new vehicle.

The government has raised the replacement subsidy from 1 billion yuan to 5 billion yuan in 2009.

The subsidized trade-in program covers medium, light, and mini-trucks/vans and medium, light and mini-cars of a certain age. It also covers gasoline-powered and diesel vehicles that fail to meet emissions standards.

To get the subsidy, the registered owner must turn the vehicle in to an approved recycling company and get a certificate.

He or she buys a new vehicle.

Then, he or she applies for the subsidy by showing the certificate, sales receipt and personal or company ID to the relevant department.

If approved, the owner will be given an official requisition and receive a subsidy at some point.



Subsidies (maximum)

Medium truck - 6,000 yuan (US$878)

Light truck - 5,000 yuan

Mini-truck/van - 4,000 yuan

Medium passenger car - 5,000 yuan

Light passenger car - 4,000 yuan

Mini passenger car - 3,000 yuan

Others - 6,000 yuan Purchasing energy-efficient ACs

If you buy a new energy-efficient air-conditioner, you get an additional discount, even if you do not turn in your old AC.

The central government has granted a subsidy of 300-850 yuan (US$44-125) per AC unit to manufacturers of level-1 or level-2 appliances. The levels refer to energy efficiency.

Shanghai consumers can save a total 400-1,000 yuan on an AC after the city government approved a local subsidy last month. The city discount runs through May 31, 2010.

The policy promotes the use of energy-efficient air-conditioners, which will help reduce emission and relieve pressure on the electricity grid in peak hours, says Zhou Ya, chief economist of the Shanghai Development and Reform Commission.

According to city estimates, there are an estimated 10 million air-conditioners and if they were all exchanged for energy-efficient models, the peak electricity usage could be reduced by 2 million kw, saving 1 billion kwh a year. This would help save around 100,000 tons of coal and reduce carbon dioxide by more than 1 million tons.

Consumers needn't worry about outlets charging too much because there's keen competition among markets and because the government is capping AC prices, says Zhou. How to get a discount

Get an application form for replacement.

Get an "old for new" certificate.

Get a receipt for the new appliance.

Personal identity card or company ID is required.

You can apply for an "old for new" card through Internet, telephone or directly at the market.





At Suning Mart

Apply for an "old for new" certificate at the service desk and register your old appliance (detailed information on make, model, serial number).

You will get two certificates, one entitling you to a discount on a new appliance, the other entitling you to payment for the old.

Show one certificate when you purchase and get a discount. Show the other when the old appliance is collected, and get payment for the old appliance.





Suning subsidies

Electric water heater/microwave oven - 80 yuan

Gas water heater - 150 yuan

Single-door refrigerator - 130 yuan

Double-door refrigerator - 200 yuan

Single/double cylinder washing machine - 100 yuan

Washing machine - 180 yuan

Air-conditioner (1p-1.5p) - 320 yuan

Air-conditioner (2p) - 520 yuan

Air-conditioner (3p-5p) - 750 yuan

Traditional television - 150 yuan

Flat-screen television/HDTV - 300 yuan