China’s premier urges tighter price oversight as deflation pressures mount

Chinese Prime Minister Li Qiang called for a firmer pricing regulation in the electric car industry. High -level meeting Wednesday, Beijing, trying to restrain the turtleneck price battles that fuel deflationist pressures in the economy.

When choosing the country’s electric car sector, Li strengthened cost surveillance and price monitoring. In addition, large automobile manufacturers, prices in the determination of more self -disciplinary to the suppliers to pay on time to pay.

Li said that car manufacturers should improve their competitiveness through technological innovation and quality improvements.

Excessive supply and bruising have long been fascinating concerns about price wars, Chinese policy makers have been limited to excessive capacity, such as destructive competition-especially destructive competition-especially homes, solar panels and steel rods.

With a sign that intense price wars damage businesses, China’s industrial profits fell by 9.1% in May. Official data showed that the prices of the factory gate decreased by 2.8% in the first six months of the year compared to a year ago.

Snow for Chinese car manufacturers 11.9% per year In May, even if the sales volume of cars in the country increased by 11.7% in the same period, Chinese Automobile Manufacturers AssociationMore than half of the new energy tools.

In May, the Automobile Industry Association called to stop. “Vicious competition,” This bite for the profitability of the enterprises and threatened the safety of the supply chain.

Slow consumer demand forced the profit margins for businesses. Li also called for renewed efforts to increase internal consumption, eliminate the unreasonable restrictions that prevent households’ expenditures, and to optimize policies for a consumer goods trade program.

National Statistics Bureau Vice President Sheng Laiyun Press Briefing on Tuesday Solar panel, cement and automobile industries without state intervention without making progress to mitigate these price cuts.

Even if China changed its policy messages to cope with price wars, economists pointed out that Beijing should be able to balance the task of preventing excess supply without stopping growth or at risk, especially with the United States doubts about external demand against the goods against the goods.

Economists at Nomura Bank argued that attempts to address excess capacity would include significant production cuts with a loss for product -selling manufacturers.

However, the sidewalks of investments and production production flowing to industrial sectors will probably create an additional drag on the economy.

Neo Wang, the leading Chinese economist and strategist of Evercore Heat, said that Beijing is not likely to reduce capacity significantly, “production cut is inevitably at the cost of growth and business.”

“Saving growth and jobs is higher priority for Beijing than correcting dysflation or deflation for Beijing.”

China said on Tuesday that economic growth meets expectations, 5.2% in the second quarter and has set out to meet the country’s 5% official full -year growth target.

Some companies in various industries reported Economist Intelligence Unit Senior Economist Tianchen Xu said he plans to cut out the output and may not turn into a wider supply disadvantage.

“There are always people who want to expand their market shares at low prices. Even if a price alliance is established, companies can still betray the alliance and upset competitors.” He said.