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Automobile sales fall 37% in Jan-Feb due to virus

The number of automobiles sold in mainland China in January and February declined 37% from the same period last year due to the Covid-19 outbreak.

Automobile sales had been declining since 2018 and were heavily hit by the coronavirus epidemic earlier this year, said Wang Bin, an official at China’s Ministry of Commerce.

China launched a series of supportive measures to stabilize the automobile sector and promote an industry upgrade last year, Wang said. The measures included a shift from policy direction from restricting to encouraging car ownership, a scheme to encourage the use of new energy vehicles and another scheme to encourage the replacement of old vehicles with new ones.

Wang said the central government also launched new subsidies for automobile buyers and sellers and supportive measures for automobile designers and manufacturers.

He said China will continue to help improve the manufacturing, marketing and consumption in its automobile sector and review the rules to fulfill the country’s goals to boost the economy, protect the environment and provide convenience to car users. Wang said the stabilization of the automobile markets will upgrade China’s domestic consumption market.

Increase market liquidity

The People’s Bank of China announced on Monday it would launch a 50 billion yuan reverse repo operation through interest rate bidding in a bid to maintain reasonable and sufficient liquidity in the banking system. The 50 billion yuan 7-day reverse repo operation was carried out with the winning interest rate of 2.2%, up from 2.4%.

Ma Jun, a member of the Central Bank’s Monetary Policy Committee and a researcher at Tsinghua University’s National Institute of Finance, said the 20 basis points drop in the bid-winning interest rate in the open market operation marked that monetary policy had entered a stage of intensifying counter-cyclical adjustment.

The decision to cut interest rates at this point was made after taking into account the demands to return to work and resuming production at home, the epidemic situation abroad and the deterioration of the external economic environment, according to a report by the China Securities Network.

Foreign exchange market

China’s foreign exchange market transactions amounted to 12.20 trillion yuan (US$1.74 trillion) in February 2020, down 4.9% from 12.83 trillion yuan in the same period last year, according to the State Administration of Foreign Exchange. In the first two months of this year, the figures totaled 25.63 trillion yuan, down 20.9% from 32.4 trillion yuan.

LPG futures, options

The trading of liquefied petroleum gas (LPG) futures contracts commenced on the Dalian Commodity Exchange on Monday. The trading of LPG options will debut Tuesday as China seeks to offer more effective tools for enterprises to reduce risks from volatile prices.

The benchmark price of the five listed LPG futures contracts, sized at 20 tonnes per lot, was set at 2,600 yuan per tonne.

The launch of LPG futures and options will help enterprises better navigate risks and boost market confidence amid the epidemic, according to Li Zhengqiang, chairman of Dalian Commodity Exchange.

Company news

China Construction Bank, one of China’s four biggest lenders, said its net profit grew 4.74% to 266.73 billion yuan for the year ended December 31, 2019, from 254.66 billion yuan in 2018. The company proposed to deliver about 80 billion yuan, or 30% of its net profit, as dividends.

Huawei Technologies, a Shenzhen-based technology company, said it will invest $1.5 billion in its Kunpeng computing ecosystem over the next five years.

The company will invest $200 million this year to support universities, startups, individual developers and its partners in the Kunpeng computing industry, Hou Jinlong, president of Huawei’s cloud and AI business group, said in a speech at the Huawei Developer Conference 2020 over the internet on March 27.

Sinopec Group, the world’s largest oil refining, gas and petrochemical conglomerate, said its net profit decreased 8.7% to 57.59 billion yuan for the year ended December 31, 2019, from a year ago. Total operating revenue grew 2.6% to 2.97 trillion yuan. Due to a decline in global oil prices, the three oil giants in China have decided to reduce their capital expenditures for 2020.

The story was written by Xu Jiangshan and Yang Zhijie and first published at ATimesCN.com.


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