Worried China Considers New Subsidies For Cars

Bertel Schmitt
by Bertel Schmitt

When China’s CAAM announces December car sales this coming week, China will have eked out a single digit growth rate for the year. Some of the slowdown was intentional, the explosive growth of 2010 was considered harmful in many ways. Looking into 2012 however, Chinese business leaders und bureaucrats are getting worried. Out comes a measure that had worked so well in 2010: Subsidies.

“New measures are in the pipeline,” to boost consumption, Huang Hai, former assistant minister of commerce and member of the economic and trade policy consulting committee, told China Daily.

Ministry of Commerce spokesman Shen Danyang also confirmed that his ministry is putting the final touches on new programs, expected to be announced next week.

What is most likely coming are subsidies for cars and household appliances.

China’s exports have steadily fallen over the past few months. According to Reuters, Europe is China’s single largest export market, but export growth to the continent slowed to just 5 percent in November from a year ago. Exports in November expanded 13.8 percent from a year ago, the most sluggish rate in more than two years. China now aims to prop up domestic consumption.

Bertel Schmitt
Bertel Schmitt

Bertel Schmitt comes back to journalism after taking a 35 year break in advertising and marketing. He ran and owned advertising agencies in Duesseldorf, Germany, and New York City. Volkswagen A.G. was Bertel's most important corporate account. Schmitt's advertising and marketing career touched many corners of the industry with a special focus on automotive products and services. Since 2004, he lives in Japan and China with his wife <a href="http://www.tomokoandbertel.com"> Tomoko </a>. Bertel Schmitt is a founding board member of the <a href="http://www.offshoresuperseries.com"> Offshore Super Series </a>, an American offshore powerboat racing organization. He is co-owner of the racing team Typhoon.

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 5 comments
  • Marko Marko on Jan 04, 2012

    I didn't know that you could still buy a new Oldsmobile in China.

  • Daveainchina Daveainchina on Jan 04, 2012

    I think you're referring to the Soueast logo.

    • See 1 previous
    • Daveainchina Daveainchina on Jan 05, 2012

      @Tycho de Feyter you're right, I knew I got it wrong as soon as I left the building today. For some reason I always seem to get those two mixed up, no real reason to either, one is like a bird's head and the other is a stylized 1. Anyway thanks for correcting me. My mistake.

  • Cmoibenlepro Cmoibenlepro on Jan 05, 2012

    The Chinese consumer does not care about subsidies and incentives. Money is only a small factor now that people need to win a lottery to buy a car. High growth rates are things from the past, now the Chinese market will decrease.

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