As the China-US trade war rumbles on, Guangdong is preparing to cushion the inevitable impact of a decline in foreign trade with its biggest partner. Yesterday we reported on credit policymaking at the central bank that had allowed a jump in new bank loans in April, at a rate not seen since 2011. Today, local news media are reporting on the provincial government’s efforts to stimulate domestic consumption.
It would appear that the automobile industry, which has slowed sharply recently, is set to get preferential treatment under the new plan. Incentives will be rolled out for upgrades on private cars to new energy vehicles, while charging stations will be constructed at a quicker pace. Provincial expressway service stations, public car parks and residential communities will soon be getting new facilities installed as a result.
Licensing restrictions will also be eased, with the government adding more quotas for new licenses. It will also seek to improve trade in the second-hand vehicle market by simplifying transfer procedures.
Guangdong isn’t acting out of desperation. In Q1, retail sales in the province grew 6.9% year-on-year, although this was down 3 percentage points YoY. Sales of commercial vehicles accounted for the biggest drag, falling 7.7% year-on-year, down 17.5 percentage points YoY.
Stimulating the vehicle market in Guangdong won’t be easy. According to the Provincial Bureau of Statistics, after the rapid growth of recent years, car ownership has reached a relatively high level. Some cities have set limits on license plates, increasing the cost of owning a vehicle. Environmental standards have also slowed demand.
As a major manufacturing hub for vehicles, promoting car consumption is also promoting the development of the province’s automobile industry.
Read more (in Chinese).