The Chinese auto industry could be headed for calamity after at least six cities across the country suspended trade-in subsidies for car purchasers, partly due to government funding running out.
This action could slow new car sales and hinder a vital industry for the second-largest economy in the world, according to Reuters.
Governments in Zhengzhou and Luoyang reportedly blamed the issue on funding cuts from Beijing, while the cities of Shenyang and Chongqing said it was done to “improve capital efficiency.”
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State-run media in China claimed that new cars were being disguised as used ones and then sold to clear inventory. Businesses were also pretending that new automobiles were used to trade them in for the subsidies.
China’s economy relies heavily on subsidies for various
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