CGTN Europe interviewed Zhang Zhiwei, President & Chief Economist at Pinpoint Asset Management
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00:00Zhang Zhewei is President and Chief Economist at Pinpoint Asset Management.
00:05It has been very impactful, I would say, over the past few years.
00:10And, for instance, last year, I think half of the cars that are sold in China
00:15turns out to be EV cars, to some extent that's driven by this government subsidy program.
00:22And I think one year ago, in 2023, only about 31% of cars that were sold were EVs.
00:31So from 30% to 50% within a year, that's quite a big improvement.
00:37And it also applies to petrol and diesel cars with smaller engines too.
00:43How does this balance the move towards EVs with the ongoing demand for traditional vehicles?
00:50Yeah, there's a balance.
00:52So the government wouldn't want to shift all those subsidies to just the EV industry
01:00because there are, within the auto industry, there are quite many factories already.
01:07A lot of capex went in that gasoline car kind of segment.
01:14So the government tried to make a balance, but they do want to provide more subsidies for EV cars.
01:21And for that matter, the increase of EV purchase is quite significant over the past few years.
01:31So I think the government is managing to develop this EV industry already quite successfully.
01:40And the subsidy program doesn't just apply to vehicles, does it?
01:44Home appliances, tech devices like phones are included.
01:48What could this do to consumer behavior?
01:52I think it's already changing consumer behavior.
01:55So last year, we've seen some cities, local cities, provided subsidies for home electronic compliances
02:05and smartphones, and it turns out to be very successful.
02:10I think that's why the central government is now rolling out this program on the national level for all the cities in China.
02:17And I do think that the sales of these eligible products will pick up in the coming months
02:26and hopefully providing a booster for the macro economy.
02:30And what about China's place in the global EV market?
02:34What does this subsidy program do for that?
02:37I think over the past few years, the subsidies program contributed to this quite big increase of EV market share in China's auto market.
02:50And China now, I think, is already a leading market globally for EVs.
02:58I think that these kinds of subsidies played a very important role.
03:02But down the road, probably a lot of these developments, a lot of these subsidies will phase out in the coming years.
03:11But for this year, I think it will continue to play a big role.