Due to weak domestic demand, the Chinese government will provide nearly $1,400 in trade-in subsidies to car owners: China

China plans to provide car owners with car trade-in subsidies of up to nearly $1,400. The Wall Street Journal and Agence France-Presse reported on the 27th that the Chinese Ministry of Commerce and other ministries announced in a joint statement on Friday that passenger access will be suspended from the date of publication of relevant details until the end of this year. did. Private consumers of new energy passenger vehicles can enjoy government subsidies of up to RMB 10,000 (US$1,381) if they meet certain conditions and purchase an eligible vehicle. If you scrap a fuel-powered passenger vehicle that meets certain conditions and purchase a fuel-powered vehicle with an engine displacement of 2.0 liters or less, you will receive a subsidy of 7,000 yuan.

The Wall Street Journal reported that domestic demand in China, the world’s second-largest economy, is currently weak and the country’s policymakers are trying to stimulate consumption. The Chinese government launched similar trade-in programs in 2009 and 2010 to stimulate domestic demand.

The Wall Street Journal reported that Deutsche Bank analysts said in a recent report that they expect low-cost cars, such as some BYD cars, to be the biggest beneficiaries of the trade-in subsidy program. I told him.

Oversea-Chinese Bank (OCBC) Greater China economist Tommy Hsieh said in a report that equipment upgrades and consumer goods trade-ins are not a panacea for China’s structural problems. He said this could be a short-term solution or buy time until China rebalances its economy.

The measure will remain in effect until the end of this year and will apply to the purchase of all new electric or hybrid vehicles, Agence France-Presse reported on Monday. The announcement coincides with the China Auto Show, with Chinese brands gaining attention among foreign manufacturers struggling with the transition to electric vehicles.

The decision comes as Chinese automakers face increased scrutiny in many Western countries.

Under pressure from France, which owns several long-established automakers, the European Commission has reportedly launched an investigation into state subsidies for China’s electric vehicle industry, and plans to impose additional tariffs to protect the European market. He said that there is a possibility that

The United States generally opposes subsidies, believing they lead to “overcapacity” of production and hurt global competition. The US government is also concerned about the potential national security risks posed by Chinese-made vehicles.

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