2024-02-25 15:38:00
Xi Jinping, General Secretary of the Communist Party of China, emphasized that accelerating product upgrading is an important measure to promote high-quality development, and called for encouraging the replacement of old cars and home appliances with new ones. Scholars interviewed analyzed that the latest policy deployment by China’s top leaders is to further boost domestic consumption to drive growth, while at the same time hedging once morest unfavorable foreign trade factors such as restrictions on Chinese automobile imports by the United States and Europe.
When Xi Jinping chaired a meeting of the Central Financial and Economic Committee of the Communist Party of China last Friday (February 23), he emphasized that the implementation of large-scale equipment updates and trade-in of consumer goods will effectively promote investment and consumption; it is necessary to encourage the trade-in of traditional consumer goods such as automobiles and home appliances, and promote the trade-in of durable consumer goods. .
He also pointed out that logistics is the “string” of the real economy, connecting production and consumption, domestic trade and foreign trade, and must effectively reduce the logistics costs of the whole society.
China’s consumption has gradually recovered since last year. Data from the National Bureau of Statistics show that the total retail sales of consumer goods last year reached 47.15 trillion yuan (RMB, the same below, 8.91 trillion Singapore dollars), an increase of 7.2% over 2022, boosting the gross domestic product (GDP). ) increased by 4.3 percentage points.
However, China’s auto sales got off to a bad start this year due to low market confidence and the gradual saturation of the market. According to data from the China Passenger Car Market Information Joint Conference, sales of passenger cars and new energy vehicles fell by 15% and 37% month-on-month respectively in January this year.
The China Passenger Car Association preliminarily predicts that due to the disruption of the Spring Festival holiday and the fact that consumers are waiting for further price cuts, the passenger car retail market sales in February will fall by 15.7% year-on-year.
The latest policy deployment by China’s top leaders may boost China’s auto sales. Auto-related sectors performed well on Friday. According to statistics from the financial data service provider Oriental Fortune, the auto parts sector and the auto service sector rose by 3.52% and 3.23% respectively that day.
Fu Fangjian, associate professor at Singapore Management University’s Lee Kong Chian School of Business, analyzed in an interview with Lianhe Zaobao that China’s economy continues to be weak. Officials thought that the relaxation of epidemic control last year would automatically release private consumption power, but the results clearly showed that the results were not good. The active consumption power of the market continues to be insufficient.
Analysts: The government is expected to boost consumption through consumer coupons and discounts in disguise
Fu Fangjian concluded that when China’s top leaders proposed trade-in, they used the power of the government to guide consumption. It is expected that consumer coupons and discount subsidies will be used in disguise to stimulate people to accelerate the purchase of cars, large home appliances and other commodities, further boosting domestic consumption.
After China exported 4.91 million vehicles last year, ranking first in the world for the first time, the United States reportedly considered adopting measures other than tariffs to restrict the import of Chinese smart cars and related parts; the European Union also launched a countervailing investigation into Chinese electric vehicles.
Fu Fangjian analyzed that China is currently facing a complex and severe foreign trade situation. While the consumption power of the United States and Europe is declining, it continues to “de-risk” China and reduce imports of goods from China. China’s top leaders proposed the trade-in of traditional consumer goods for new ones, which also aims to offset unfavorable factors such as restrictions on Chinese automobile imports by the United States and Europe, and to increase support for the development of China’s automobile industry by stimulating domestic demand as a substitute.
Fu Fangjian said that as China’s automobile production capacity continues to increase and domestic automobile companies continue to “involve” in product prices and quality, stimulating domestic consumption will be a good boost to industrial development. He also sees that China is currently significantly increasing its policy changes and hopes to return to its more market-oriented approach before the epidemic and let the market play a leading role to further win back the confidence of foreign investors in investing in China.
As the world’s largest electric vehicle market, fierce competition in China has forced smaller manufacturers out of business. According to Bloomberg, regarding 100 electric vehicle manufacturers were registered in China last year, down from regarding 500 in 2019.
On the other hand, as foreign direct investment in China fell to a 30-year low, Chinese Premier Li Qiang requested at the State Council executive meeting last Friday that stabilizing foreign investment should be an important focus of economic work this year.
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