MNI China Press Digest Mar 22: Autos, Local Gov, Real-Estate

Highlights from Chinese press reports on Thursday:

• Consumer’s are expected to have purchased around 750,000 new energy vehicles in March, up 37.1% y/y and 93.2% m/m, as price cuts for EVs after the Chinese spring festival spurred demand, according to the Passenger Car Association. The narrow passenger car market in total sold 1.65 million units, a slight increase of 3.7% y/y, the association added. Customers remain cautious overall due to the ongoing price war and implementation of old-for-new policies, which has hampered demand. (Source: Yicai)
• Local governments should ensure the timely repayment of principal and interest on statutory debt amid sharply declining land-sale revenue, according to Yicai.com in a commentary. The issuance of local government special bonds has surged to stabilise growth in recent years. While nearly 90% of the principal is repaid by rollovers, the interest can only be met with fiscal funds. In 2023, local interest payments totaled CNY1.23 trillion. Local governments have prioritised repayment in fiscal expenditures, and some have set up a reserve system to avoid default. Land-sale revenue may stabilise this year following policies to support the property market, which could help ease some repayment pressure.
• Authorities support for the "three major projects," should ensure declines in real-estate investment continue to narrow this year, according to Cai Rui, chief strategist at BoCom International. The government's plan to issue CNY1 trillion of ultra-long-term special treasury bonds will bolster local-government finances and boost China’s GDP by an additional 0.2-0.25pp this year, according to Lian Ping, chairman at the China Chief Economists Forum. (Source: 21st Century Business Herald)