SHANGHAI -- The State Council, China’s cabinet, last week released a long list of steps it will take to boost consumer consumption.
Proposals intended to revive auto sales made the cut, but they are not new. Market realities and the government's conflicting policy goals make the measures appear more like wishes than enforceable policies.
The latest proposals seek to boost sales of new vehicles, including those that are electrified, as well as used vehicles.
In a release, the State Council says it will push for the relaxation or removal of restrictions that several cities have imposed on new-vehicle sales.
The central government said the same thing in April. But among the eight cities that limit new-car sales, only two south China cities – Guangzhou and Shenzhen – have agreed to loosen restrictions for some time.
Guangzhou and Shenzhen disclosed in June that they would allow a respective 100,000 and 80,000 new cars to be sold locally from June 2019 to the end of 2020, on top of existing annual quotas.
Other cities haven’t yet responded to the central government’s request. They include China’s two largest cities -- Shanghai and Beijing -- and four provincial capitals -- Tianjin, Hangzhou, Xi’an and Guizhou.
The cities have strong reasons to resist the central government’s proposals: They are all densely populated and perpetually plagued with traffic congestion.
In a document released last week, the State Council also called on China’s provinces to “actively” support sales of electrified vehicles.
But there is probably not much provincial governments can do on that front. Since March, the central government has barred them from subsidizing sales of EVs and plug-in hybrids to curb protectionism.
In the same document, the central government said it will push more cities to let local residents buy used vehicles from other cities or areas in a bid to encourage demand.
Since 2016, the central government has repeatedly pitched the policy but failed to achieve the desired results.
Many Chinese cities, especially those in coastal areas, refuse to follow the proposal because they want to reduce vehicle emissions.
Because of the environmental protection campaign Beijing launched last year, most coastal cities were forced to upgrade vehicle emissions standards, well ahead of original schedules.
Facing the pressure from the campaign, opening markets to more used vehicles, nearly all of which fall short of the new emissions rules, is probably the last thing they want to do.
It is almost certain that new-vehicle sales in China will fall for the second straight year in 2019 after slumping 11 percent in the first seven months.
The slowing domestic economy and the trade war with the United States have dampened consumer demand for vehicles.
Unless the central government aligns its policy goals, it is unlikely to give the auto market a much-needed boost.