CBN丨China’s trade-in program yields strong sales in cars, home appliances

Hi everyone. I’m Stephanie LI.

Coming up on today’s program

• Trade-in program continues to boost consumption with 5 million applications for autos;
• Huangmao Sea Channel Bridge, western extension of the Hong Kong-Zhuhai-Macao Bridge, opens to traffic.

Here’s what you need to know about China in the past 24 hours

China's trade-in program targeting automobiles is progressing steadily with policy effects accelerating, as combined auto trade-ins surpassed 5 million units by Monday, said the Ministry of Commerce on Tuesday.

Over 2.44 million units were scrapped and renewed while more than 2.59 million were replaced, according to the ministry.

As a key focus of the consumer goods trade-in policy, the vehicle sector has seen substantial growth of car sales in recent months.

In November, domestic retail sales of passenger cars reached 2.423 million units, marking a year-on-year increase of 16.5 percent, representing a growth of 5.2 percentage points compared to October. From January to November, total retail sales of passenger cars stood at 20.257 million units, reflecting a year-on-year increase of 4.7 percent.

People who purchase an electric car to replace an old vehicle that does not meet the latest emissions standards can receive a one-off subsidy of 20,000 yuan, while those buying a fossil fuel-powered auto with a displacement of 2 liters or less will receive a subsidy of 15,000 yuan. As a result, those wanting to upgrade their vehicle will generally choose to buy an NEV.

And as for trade-ins, those who swap their auto for an NEV will receive around 3,000 yuan more than those who opt for a gasoline-powered car.

Although the trade-in subsidies have only been in place for a short time, they are having a much bigger effect on boosting sales than the vehicle scrapping ones, said Cui Dongshu, secretary-general of the China Passenger Car Association.

Meanwhile, other sectors involved in the trade-in programs have also seen growing sales momentum. Nationwide, the home appliance trade-in program exceeded 100 billion yuan in sales within 79 days, and it took only 40 additional days to reach 200 billion yuan, underscoring the accelerating momentum of consumption upgrades.

Greater Bay Area, Greater future

• The Huangmao Sea Channel Bridge in South China's Guangdong Province, a pivotal infrastructure project in the Greater Bay Area (GBA) and the western extension of the Hong Kong-Zhuhai-Macao Bridge, opens to traffic on Wednesday. The travel time from Zhuhai to Jiangmen is cut to 30 minutes.
• China's domestically developed C919 aircraft will be used to operate commercial flights connecting Guangzhou, Guangdong province with Haikou, Hainan province, starting Wednesday, the first time that the jetliner will operate in Hainan. Operated by Guangzhou-based China Southern Airlines, Haikou will become the carrier's fifth destination for the aircraft model.
• Hong Kong Chief Executive John Lee said on Wednesday that the city will continue to make use of its strengths in the fields of aviation and cargo to contribute to the development of an international logistics hub in the Greater Bay Area. Officiating at the second Business Conference on Guangdong-Hong Kong-Macao Greater Bay Area Development, Lee said Hong Kong will make use of its professional marine services, and cooperate with the mainland and Macao to increase the competitiveness of the Greater Bay Area's port clusters. As for aviation, Hong Kong is developing intermodal cargo‑transhipment with Dongguan, and has brought forward the development of the Hong Kong International Airport Dongguan Logistics Park, Lee added.

Next on industry and company news

• China’s Contemporary Amperex Technology and European automaker Stellantis will invest EUR4 billion to build a plant in northern Spain that will make electric vehicles batteries. The pair have set up a joint venture for the project and expect to begin production at the factory in Zaragoza, which will have an annual capacity to turn out 50 gigawatt hours of lithium iron phosphate batteries, by the end of 2026, CATL announced yesterday. Meanwhile, the battery giant said it would distribute 5.4 billion yuan cash dividends. Shareholders will receive 12.30 yuan per 10 shares.
• Mao Geping Cosmetics, a beauty brand named after famous Chinese makeup artist Mao Geping, surged over 90 percent on its first trading day in Hong Kong. The renowned seller of foundation and face masks issued 78.4 million new shares at a price of HKD29.8 each, securing net proceeds of HKD2.2 billion from its initial public offering. The stock ended at HKD51.95 today.

Switching gears to financial news

• Shanghai has released a new action plan to facilitate 300 billion yuan in mergers and acquisitions transactions over the next three years to fully support the M&A of listed companies. Shanghai will land several industry-representative M&As and cultivate about 10 internationally competitive listed firms in integrated circuits, biomedicine, new materials, and other key areas by 2027, according to the plan the local government released yesterday.

Wrapping up with a quick look at the stock market

• Chinese stocks closed higher on Wednesday, with the benchmark Shanghai Composite and the Shenzhen Component each up 0.3 percent. Hong Kong’s Hang Seng index shed 0.8 percent and the TECH index fell 1.3 percent.

Executive Editor: Sonia YU

Editor: LI Yanxia

Host: Stephanie LI

Writer: Stephanie LI

Sound Editor: Stephanie LI

Graphic Designer: ZHENG Wenjing, LIAO Yuanni

Produced by 21st Century Business Herald Dept. of Overseas News.

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