China has issued a series of guidelines to stimulate consumption, including support for the sluggish auto market, as announced by the State Council on its official website on August 27. The measures include exploring ways to gradually relax or lift car purchase restrictions and support new-energy vehicle purchases in some areas. Meanwhile, the State Council indicated that it will promote the circulation of second-hand cars, including further implementing the policy to abolish all restrictions on the transfer of second-hand cars, while second-hand cars meeting emissions standards should be allowed to circulate in key areas which are subject to air pollution controls.
In July, China’s vehicle sales amounted to 1.808 million units, down 12.1 percent month on month, while down 4.3 percent year on year, the 13th consecutive year-on-year decline since July 2018, according to figures released this month by the China Association of Automobile Manufacturers (CAAM). The sluggishness of the auto industry has dragged down the growth of China’s overall retail sales of consumer goods. For instance, in July, the year-on-year growth figure was 7.6 percent, while excluding automobiles the figure was 8.8 percent.
The State Council also stated that it would encourage commercially struggling malls, stadiums and old factory zones to be transformed into commercial complexes, and gym and entertainment centers, and that it will renovate commercial pedestrian streets across the country.
Market analysts have commented that vehicle consumption is a mirror reflecting China’s problem in consumption. The government’s stimulus policy is expected to ease the contradiction between supply and demand.
