China's latest plan to upgrade industrial equipment is expected to inject vitality into the country's new industrialization push and boost demand for high-end industrial products at home, experts said on Wednesday.

The comments came after the Ministry of Industry and Information Technology and six other government departments jointly released a plan for promoting equipment renewal in the industrial sector on their official websites, aiming for a growth of over 25 percent in industrial equipment investment by 2027 compared to the level in 2023.

Investment in industrial equipment accounts for over 70 percent of total equipment investment in the country, and the annual scale of equipment renewal in the industrial sector is around 4 trillion yuan ($553 billion), said Fan Meng, director of the industrial investment research office of market research company CCID Consulting.

That figure is based on the National Development and Reform Commission's estimate that equipment renewal represents a vast market with an annual scale exceeding 5 trillion yuan.

Specifically, key highlights of the latest plan include achieving a digitalization rate of over 90 percent for research and development design tools in big industrial enterprises, and the use rate of computer numerical control exceeding 75 percent for key processes in them. It also aims for full coverage of digital transformation in major industrial provinces, cities and key industrial parks.

The plan prioritizes the retirement of outdated and inefficient equipment, particularly in industries such as industrial machinery, agricultural machinery and engineering machinery, while encouraging the adoption of advanced equipment in sectors like aviation, photovoltaics, and biotechnology.

On the digital transformation front, the plan focuses on promoting the application of intelligent manufacturing equipment such as industrial robots and unmanned transport vehicles. It emphasizes the use of new technologies such as artificial intelligence, 5G and cloud computing to accelerate the development of smart factories and strengthen digital infrastructure.

Yu Xiaohui, head of the China Academy of Information and Communications Technology, a Beijing-based think tank affiliated with the MIIT, said enterprises are the main players in the renewal of industrial equipment.

Lack of willingness, funding, and supportive policies are the primary obstacles that hinder companies from engaging in equipment renewal, Yu said, emphasizing the need for both market-driven resource allocation and effective government guidance to promote large-scale equipment renewal.

The plan proposes several measures to promote equipment renewal in the industrial sector. In terms of finance and taxation, the plan emphasizes the need to increase financial support for equipment renewal and technological transformation in the industrial sector, advocating greater tax incentives for energy conservation, water conservation, environmental protection and safety production equipment, as well as including digitalization and intelligent transformation within the scope of preferential treatment.

Analysts at Wanlian Securities said in a research note that strategic emerging and future industries will be the key focus areas for industrial upgrade under the plan for developing new quality productive forces.

They also said the policies guiding large-scale equipment renewal will directly benefit the high-end, intelligent and green trajectory of the industrial equipment sector.

China, as a manufacturing powerhouse, recorded an industrial output of 39.9 trillion yuan in 2023, accounting for 31.7 percent of its GDP and over 30 percent of global manufacturing output, maintaining its position as the world's leading manufacturer for 14 consecutive years, data from MIIT show.

With the deepening of the new industrialization drive, the demand for advanced equipment in the industrial sector is expected to grow, making large-scale equipment renewal a focal point, experts said.