Since the launch of the “Two New” policy framework in 2024, equipment renewal has been used to boost investment and support industrial upgrading. The focus has been on rapidly activating domestic demand through funding tools such as treasury bonds, loans, and tax incentives. Since early 2025, the policy has expanded in scope, with clearer standards and stronger alignment with China’s low-carbon and technological innovation goals.
The 2026 update reflects a new phase of this policy: on one hand, it covers a wider range of eligible categories, but on the other hand, it emphasizes stricter oversight and compliance, and a more cautious approach to large funding packages. Based on the latest policy signals, key changes include:
- No major expansion of bond or bank loan support
- More eligible categories, with some adjustments in priority sectors
- Greater focus on SMEs and smaller projects
- Tighter rules on supervision, standards, and compliance
Our latest Action Tracker walks you through what has changed and what it means for German companies in China. Click the button to learn more: