MNI China Press Digest May 10: Cars, SMEs, Policy Support

Highlights from Chinese press reports on Wednesday:

• Authorities have granted a six-month extension on the sale of light vehicles that do not comply with the new National VI B emission standards law, which bans the sale of non-compliant vehicles from July 1, according to the Ministry of Ecology and Environment. The China Automobile Association calculated the current inventory of vehicles not meeting the new standard at 1.89 million units and said the extension was a welcome relief for the industry. The ministry said it would make efforts to monitor inventory levels and guide the industry switch to the new standard as soon as possible. (Source: Yicai)
• China’s SME firms face insufficient demand and declining profits, according to the China Association of Small and Medium Enterprises. The associations’ Small and Medium Enterprise Development Index (SMEDI) for April was 89.0, a decrease of 0.3 points from the previous month, with declines noted in industrial, transportation, real estate, and social service sectors. Increases were recorded in the catering industry, while wholesale and retail industries remained unchanged. China must do more to deepen reform and open up in order to stimulate economic growth and consolidate the economic recovery, the association said. (Source: 21st Century Herald)
• China needs to maintain proactive fiscal policy and prudent monetary policy to ensure the economic recovery consolidation, according to experts and analysts interviewed by Yicai. The news outlet said Q1 has shown areas of recovery, with services recovering faster than industry, but remains uncertain if the rebound in momentum can be maintained. One expert noted corporate confidence remains insufficient and the overall economy has not returned to potential growth rate yet. Land acquisitions in the property sector remain low, pointing to ongoing weakness in the housing industry rebound.