China Has No Imminent Auto Stimulus Plan, Official Says
China has no imminent plans to introduce more stimulus policies to help revive vehicle demand in the world’s biggest auto market, according to an official with the country’s top economic planner.
The National Development and Reform Commission is still studying the feasibility for measures to subsidize vehicle purchases in rural areas, said Chen Jianguo, deputy director of the agency’s industry coordination department.
“We’re still looking into the issue of whether such policy is even needed,” Chen said yesterday in an interview in Dalian, China. “It is common sense” that there’s no need for the same kind of stimulus policies introduced in 2009.
Chen’s comments may reduce speculation that the state will step up auto subsidies after a government official said China’s cabinet agreed last month to revive financial incentives for consumers to trade in their passenger cars to help increase demand. Vehicle demand in China has slowed this year with the economy and as consumers push back purchases in anticipation of government stimulus.
“The issue has to be studied closely, such as what vehicle types are eligible,” said Chen, whose department oversees industry planning. “There’s not much meaning to subsidize farmers to drive sedans.”
The finance ministry said on May 29 that the government will spend as much as 2 billion yuan ($314 million) a year to develop alternative-energy vehicles to reduce fuel consumption.
China’s vehicle sales for May rose 16 percent from a year earlier to 1.61 million units, the China Association of Automobile Manufacturers said June 9. For the first five months of the year, passenger car sales increased 5.5 percent to 6.33 million units.
Dong Yang, deputy secretary general of the car association, said at the June 9 briefing he was unaware of stimulus policies for the automotive industry “anytime soon.”
The official Xinhua News Agency reported on May 30 that the world’s second-largest economy has no plans to introduce stimulus measures on the scale used during the last global financial crisis. China had in November 2008 announced a 4 trillion yuan stimulus package.
Back then, the government gave farmers subsidies of as much as 5,000 yuan to help them buy vehicles amid efforts to boost sales. Rural drivers who replaced an existing light truck with a new truck or minivan were given 3,000 yuan more.
To contact Bloomberg News staff for this story: Tian Ying in Beijing at email@example.com
To contact the editor responsible for this story: Chua Kong Ho at firstname.lastname@example.org