MNI China Press Digest Feb 10: Cars, Infrastructure, Spending

Highlights from Chinese press reports on Friday:

• Car sales in China will rebound in February following a drop in sales during January, as local governments and car companies increase purchase incentives and Lunar New Year festival disruptions subside, according to the Securities Daily. The paper said following the ending of central government subsidies on new energy vehicles at the start of this year, many local governments have stepped in with purchase incentives to stabilize market demand. Additionally, the car market in China has far from peaked, as a strong backlog of new drivers are set to enter the market. Citing experts, the paper said measures should be taken to accelerate the pace of car exports, and enhance the global competitiveness of China’s new energy vehicle industry.
• Next generation infrastructure projects such as 5G networks, smart-parks and green energy transformation will play an important role in stabilising the economy in 2023 and boosting high quality development, according to the Securities Daily. The paper quotes several local governments as prioritising support for next generation infrastructure, such as for land and financing. By 2025, investment in China's new infrastructure will reach CNY13.9 trillion, the paper said. Next generation infrastructure will also benefit from increased use of quasi-fiscal tools, the introduction of real-estate investment trust type financing models, and public-private partnerships.
• The recent boom in homeowners voluntarily increasing their mortgage repayments comes at the expense of boosting consumption in 2023, and this will continue for several months unless measures are taken to incentivise people to save less, according to an editorial by Yicai.com. The news outlet said the repayment issue could be solved by reducing legacy mortgage rates of 6-7% closer to recently available rates of around 4%. Macro-policies are needed to ensure strong economic growth for 2023, in order to boost consumer confidence and encourage expenditure over precautionary savings, the paper said.