Don't Let This Billion-Dollar Bailout Fool You

China’s stimulus for the auto industry has been all over the map. Measures that help some players wind up setting back priorities for others. But one thing is clear: The billions of yuan that vaulted China to become the world’s largest car market aren’t there. Don’t be fooled by the numbers you see in coming months.

All told, China’s aid package adds up to around 8 billion yuan ($1.13 billion), according to Goldman Sachs Group Inc. That’s a far cry from the 25 billion yuan to 30 billion yuan spent just on electric vehicle incentives last year, or the 100-billion-yuan-plus laid out in the 2015 to 2017 stimulus cycle. There’s a bigger problem than fiscal constraints, though. Beijing’s policies will do little to boost consumer demand and only add volume — exactly what a market awash in supply doesn’t need. Big discretionary spending items like cars are unlikely to top post-coronavirus shopping lists, even if people are initially wary of public transportation.