MNI China Press Digest July 6: Car Tax, K-Recovery, Logistics

Highlights from Chinese press reports on Monday:

• China's adjustment to the vehicle and vessel tax—a type of annual ownership tax—for energy-efficient and new energy vehicles marks a milestone in the country's push to give fuel and electric vehicles equal regulatory treatment, said Cui Dongshu, secretary general of the China Passenger Car Association (CPCA). He said the move accelerates the new energy vehicle industry transition from policy-driven growth to a mature, market-based stage and supports the long-term shift toward full electrification. Effective Jan. 1, 2027, China will abolish the 50% vehicle and vessel tax reduction for energy-efficient vehicles while fully battery-electric passenger cars will remain exempt. (Source: Yicai)
• Strategic competition among major powers and the winner-takes-all nature of technological development make policy responses to China's K-shaped recovery increasingly complex, Liu Yuanchun, president of Shanghai University of Finance and Economics, said. He argued that macroeconomic policy should look beyond short-term measures to boost domestic demand and instead prioritise technological innovation, using new supply to generate new demand while adapting to the structural features of the K-shaped recovery. Liu also warned that the recovery carries dual risks, including asset bubbles on the upside and debt risks on the downside, while the transition could generate spillover effects on employment, income distribution, and social stability. (Source: Yicai)

• China's Logistics Prosperity Index rose to 50.6% in June from 50.3% in May, extending its expansion, the China Federation of Logistics and Purchasing (CFLP) said. Nine of the index's 12 sub-indices remained in expansion territory. The business volume index climbed 0.3 percentage point to 50.6%, while the new orders index edged up 0.1 percentage point to 50.3%, with both posting month-on-month gains for several consecutive months. The fixed asset investment completion index rose 0.2 percentage point to 54.3% in June. (Source: 21st Century Business Herald)