Beijing, It Seems, Hopes That Used Car Salespeople Can Save China’s Economy

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Oct 17, 2025 - 09:58 Updated: Oct 17, 2025 - 02:08
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Beijing, It Seems, Hopes That Used Car Salespeople Can Save China’s Economy

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Commentary
China’s commerce ministry has turned to the used car market to boost consumer spending and, presumably, get the economy back on track.

Commerce Vice-Minister Sheng Qiuping wants to work with local governments to, he says, “remove restrictive measures in the automotive aftermarket” in order to unlock China’s “consumption potential.”

Given the troubled state of China’s economy—the ill effects of the ongoing property crisis, excess production capacities in crucial industries, and limited export-growth potentials with the United States and elsewhere—Beijing’s focus on the consumer is understandable. Still, a focus on used cars seems a bit narrow in light of the scope of China’s needs.

To accomplish their goals in the automotive aftermarket, Beijing’s planners want to remove existing administrative barriers to car buying. Because regional differences in emission standards have hamstrung the national circulation of used cars, the Chinese Communist Party (CCP) seeks to make a single national standard. With more room for used car circulation, the planners argue, spending on refurbishment and repair will add to spending on car purchases.

The CCP also wants to lift caps on the number of vehicle purchases that have previously prevailed in urban areas to control traffic congestion and air pollution. This part of the program, the commerce ministry indicates, will start with pilot programs in Beijing, Shanghai, and Guangzhou and eventually become national. Raising these caps, the CCP firmly believes, will increase auto purchases of both new and used cars.

There is reason to see potential in China’s used car market. Compared with other developed countries, it is relatively small. China’s Automobile Dealers Association reports that in the first eight months of this year, some 13 million used cars were sold in China compared to 14.7 million new cars, including electric vehicles. That is 1.13 new cars for every used one.
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In contrast, used car sales in the United States and Europe are three times the size of new car sales. If these comparisons are any indication of what might happen in China, Beijing’s planners may be onto something with their new program.
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Even if the program is wildly successful in the context of the auto market, the additional sales could not address China’s broader economic needs—these are immense. The nation’s housing market remains constrained by the ongoing property development crisis. Past public spending on production capacities in technology and other politically favored areas has contributed to overproduction, deflation, and dampened levels of capital spending in both state-owned and private firms. Local governments suffer cash shortages and debt overhangs that limit the application of infrastructure spending, Beijing’s time-honored means to stimulate the economy.

At the same time, export growth to the United States and Europe has slowed dramatically of late, while the application of new tariffs on Chinese trade by Washington, Brussels, and other nations makes the prospect of a notable pickup dim at best.

Enhancing the used car market might help tackle these problems. It certainly seems to have the potential to increase at least one or more lines of spending. But China clearly has bigger problems than a surge in used car buying can fix. Beijing needs something much more comprehensive and far-reaching. To be sure, the authorities have advanced other efforts. Still, like this used car plan, they seem to have a patchwork quality that might work in other environments but not the economy-wide problem China faces now.

Views expressed in this article are opinions of the author and do not necessarily reflect the views of The Epoch Times.
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