China policy package to boost consumption 
2019-08-28
CHINA will ease restrictions on car purchases to support auto sales as part of its policy package announced yesterday to boost the country’s consumption.
Regions with limits on vehicle purchases should roll out measures to relax or lift the restrictions after taking into account their respective condition and support the purchase of new energy vehicles, according to a guideline issued by the State Council.
The automobile sector, a pillar of industrial growth, has been a casualty of falling demand, with overall car sales down for a 13th consecutive month in July. European auto stocks rose on the news that Beijing was looking to loosen vehicle purchase restrictions.
The guideline outlined 20 measures to support consumption, including applying new technologies to promote the circulation of products, improving infrastructure of commercial streets and accelerating the development of chain convenience stores.
While China’s domestic market has seen stable expansion, the country still faces many challenges in terms of lack of innovation for traditional retailers and inadequate supply of commodities and services, the State Council said in a statement.
The guideline aims to tap China’s consumption potential and better meet the demand of Chinese consumers, it said.
The State Council added it would encourage commercially struggling malls, stadiums and old factory zones to be transformed into commercial complexes, gym and entertainment centers, as well as renovating commercial pedestrian streets across the country.
Efforts should be made to support e-commerce in the country’s rural areas and help farmers to sell agricultural products to the cities.
Authorities should make policies to help export-oriented firms to expand in the domestic market, while imports of high-quality foreign goods will be encouraged through channels such as cross-border e-commerce.
Incentives should be introduced to support consumers to exchange old home appliances and electronics for more green and smart alternatives, the guideline said. It said Beijing would extend retail hours to promote “the night economy,” with convenience stores and restaurants open longer.
Other measures also include support for the “holiday economy,” as well as fiscal and financial policies to expand consumption.
China will additionally allow city-level governments to approve retail sales of refined oil products, it said, adding that it would also encourage credit support for purchases of new energy vehicles and smart home appliances.
Consumption is playing an increasingly important role in China’s economy, contributing as much as 60.1 percent to the country’s GDP growth in the first half of the year. Retail sales of consumer goods rose 8.3 percent year on year in the first seven months of the year, down from an increase of 8.4 percent registered in the January-June period.
