China car sales slump
Beijing considers support for manufacturers after sales drop 16 per cent.
Many car manufaturers had been hoping the Chinese market, which grew by 18.5 per cent in 2007, would provide some relief as sales have been hit by the global credit crunch.
But the announcement, coming as a planned $14bn bailout for US manufacturers collapsed amid differences over workers’ wages and benefits, is likely to cause further concerns for global producers.
Li also announced that the government would provide $2.2bn to help smaller companies, which have been hit by a decline in Chinese exports, improve technology to help combat the effects of the global economic downturn.
Beijing will encourage companies to improve technology and cut energy use by subsidising interest-free loans that it hopes will stimulate $44bn to $59bn in investment, he said.
The government said this week that exports fell in November by 2.2 per cent, the first drop in seven years. The slowdown has triggered a wave of factory closures and job cuts, leading to government fears of unrest.