Coronavirus – China currency measures to stimulate car sales

While the world faces the emergence of a coronavirus, China has now passed the crisis and began to think about how to revive its economy.Among the various measures to the scrutiny of the authorities in Beijing there are also initiatives to stimulate car sales at the national level and then a production that has a significant burden on the entire supply chain, domestic industrial.

The production spread. The rest of the asian Country, after about two months of lockdown, is now out of the emergency and the outbreaks are few and related more to cases of chinese returned from abroad. The authorities then began phasing out restrictions and limitations, and production activities are now broken down, also in the area of the epicenter of the epidemic: in Wuhan, the capital of Hubei province, from April 8, will be cleared of all the prohibitions to the movement and will of the public transport services. In the whole of China, according to a statement by the deputy minister of the Industry, Xin Guobing, the automotive sector is the next to return to full normality: the 97% of the manufacturers, has resumed production activities, compared to 60% in mid-February, while 82% of employees returned to work.

Demand is still weak, warehouses full. The automotive sector must, however, face a series of problems after having solved the problems related to production stops. “The car companies are back at work and have resumed production, but their inventories due to weak market demand, are increased, which could reduce their production in the future,” said Xin Guobing. It is, therefore, necessary to empty the warehouses to give new impetus to a sector that already before the emergency of health was facing a slowdown of demand due to the weakening of the incentives to the purchase. Help is coming from some provinces, with the launch of measures such as the release of the limits to registration. Now the central authorities in Beijing are considering a series of initiatives to stimulate demand in all sectors of production and compensate for the strong decline in exports, which is determined by the diffusion of the health emergency in much of the rest of the world. The political bureau of the chinese communist Party (the Politburo), one of the greatest bodies of the hierarchical pyramid of Beijing, has revealed the intention to increase the fiscal deficit of the government and introduce measures for a wide range of stimulating consumption and, thus, revive the economy. In the study, there are also measures to provide liquidity to the companies, especially in the supply chain.

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Source: Quattroruote.en – Edited by Anthon K.