Sign up to create alerts for Instruments,
Economic Events and content by followed authors
Free Sign Up Already have an account? Sign In
Quotes
All Instrument Types
- All Instrument Types
- Indices
- Equities
- ETFs
- Funds
- Commodities
- Currencies
- Crypto
- Bonds
- Certificates
Please try another search
Extended Sale! Save on premium data with Claim 60% OFF
China's steps to boost sales of cars, electronics disappoint market
Published Jul 20, 2023 10:31PM ET
Updated Jul 21, 2023 02:15AM ET
© Reuters. FILE PHOTO-People enter the SEG E-Market at Huaqiangbei electronics market in Shenzhen, Guangdong province, China June 8, 2023. REUTERS/David Kirton/File Photo
BEIJING (Reuters) -Chinese authorities announced measures on Friday intended to help boost sales of automobiles and electronics with the goal of shoring up a sluggish economy, but the steps failed to impress investors who have been clamouring for stronger stimulus.
Regions will be encouraged to increase annual car purchase quotas and efforts will be made to support sales of second-hand vehicles, said a statement on automobile consumption published by 13 government agencies including state planner National Development and Reform Commission.
As China's post-pandemic economic recovery slows, policymakers have identified the country's automobile sector as a key lever which they want to use to shore up growth. In June, they unexpectedly extended a purchase tax break on new energy vehicles (NEVs) until 2027.
But domestic consumer demand has remained weak and the world's largest auto market has been grappling with a price war triggered by Tesla (NASDAQ:TSLA) in January that has since spread to more than 40 brands offering discounts on their vehicles.
In March, a top industry association urged the auto industry and authorities to cool the 'price-cut hype' to ensure the healthy and stable development of the industry.
The Friday statement aimed at encouraging automobile consumption echoed this. "Localities must not roll out protectionist policies and avoid vicious competition," it said.
A separate statement on supporting sales of electronics products said authorities would encourage scientific research institutes and market entities to actively apply domestic artificial intelligence (AI) technology to improve intelligence levels of electronic products.
The measures echoed similar ones announced by authorities in recent months and failed to boost the market, with shares in China’s automobiles index down 0.3% and the electronics index falling 0.6% against a 0.1% rise in the benchmark index.
"These supports will unlikely significantly boost consumption when people are still generally reluctant to spend as they lack confidence in the economic recovery," UBS said in a note on Friday. Investors have said they are disappointed by China’s weak second quarter growth and want to see stronger stimulus, with some pinning their hopes on the Politburo meeting later this month.
Related Articles
Add Chart to Comment
Confirm Block
Are you sure you want to block %USER_NAME%?
By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.
%USER_NAME% was successfully added to your Block List
Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.
Report this comment
I feel that this comment is:
Comment flagged
Thank You!
Your report has been sent to our moderators for review
Add a Comment
We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:
Enrich the conversation, don’t trash it.
Stay focused and on track. Only post material that’s relevant to the topic being discussed.
Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.
Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.