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China slowing auto sales drags down consumption growth

Xinhua | Updated: 2019-04-02 14:28
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A parking lot in Zhengzhou, Central China's Henan province, on Jan 20, 2019. [Photo/VCG]

BEIJING - Falling auto sales will continue to exert a considerable drag on the growth of the country's total retail sales in March, a report from Citic Securities said Tuesday.

Sales of passengers cars fell 19 percent year-on-year during the first three weeks of last month, according to data from the China Association of Automobile Manufacturers.

The report attributed auto sales decline partly to the expiration of favorable purchase tax policies. China restored car purchase tax to 10 percent at the beginning of last year after setting it at 7.5 percent in 2017 and 5 percent in 2015 and 2016.

The tax break had pulled demand forward as people made purchases before its expiration, said the report.

China sold 1.19 million passenger cars in February, falling for the ninth straight month.

The report expects China's consumer price index to rebound to around 2.1 percent in March and retail sales to increase by 8.4 percent from a year earlier.

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