Silk Road brings cars from China

The Chinese vehicle industry is expected to get a boost from the commerce ministry’s decision.
Francoise Steynberg
The Chinese ministry of commerce (MOC) has started allowing exports of second-hand cars, marking the country’s latest move to drive domestic sales and promote trade in the world’s biggest auto market.

The move comes after sales in China contracted last year for the first time since the 1990s. Amid worries of a further decline, Beijing handed out tax cuts earlier this year to spur consumer spending.

In its latest bid to prop up the auto sector, the ministry of commerce said it had started allowing used-car exports from 10 Chinese cities and provinces, including Beijing, Shanghai and Guangdong, and that it would offer more support to the sector.

On Tuesday, Xinhua reported that a ceremony was held the previous day in north China's Tianjin municipality for the export of 60 second-hand commercial vehicles, part of the first batch of used commercial vehicles exported from China. Having completed customs clearance in Tianjin, the vehicles, with a total value of over US$700 000, are to be exported from the Dongjiang Free Trade Port Zone in Tianjin to the Port of Apapa in Nigeria.

At the weekend, southern China's Guangdong Province reported the export of 300 second-hand vehicles. These vehicles, involving a total value of US$2.5 million, are expected to complete customs clearance in Nansha Port and be exported to Cambodia, Nigeria, Myanmar and Russia, said the ministry.

The second-hand automobile export business is conducive to accelerating the circulation of used automobiles, stimulating the domestic auto market vitality, and deepening economic and trade exchanges with countries along the Belt and Road initiative, according to the Tianjin Commission of Commerce.

The Dongjiang port will be built into the largest used vehicle export base in north China, according to Shen Lei, director of the management committee of the Dongjiang Free Trade Port Zone.

Nationally, the commerce ministry will start identifying companies that can handle such exports and has also called for the development of tests to ensure the quality and safety of second-hand car exports, it said in a statement. It described the potential for used-car exports from China as “huge”, saying that in most developed countries exports account for roughly 10% of used-car sales.

Such exports can “stimulate the vitality of the domestic automobile consumption market, promote the healthy development of China’s automobile industry, and promote the steady improvement of foreign trade”, it said.

China’s second-hand car market is still far smaller than that for new cars. In 2018, sales of used cars in China hit 13.82 million, less than half of the sales of new cars, at 28.08 million, according to the commerce ministry.

Allowing second-hand car exports “should be positive for the entire automobile market in the medium to long term”, said Alan Kang, Shanghai-based analyst at LMC Automotive. “If used cars sales are accelerated it will help smoothen sales of new cars,” he added.

The MOC said it will work with the ministry of public security and the general administration of customs to improve regulations and services to support the sector.

Nampa/Reuters/ Xinhua

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