China's auto slump extends to a year

Business | Bloomberg and Reuters 12 Jun 2019

China's car sales declined for the 12th consecutive month, a historic slump that's left manufacturers reeling as trade tensions and economic worries weigh on consumer sentiment.

Retail sales of sedans, sport utility vehicles, minivans, and multipurpose vehicles fell 12.5 percent to 1.61 million units in May, the China Passenger Car Association said yesterday.

That follows a 16.6 percent decline in April and a 12 percent drop in March.

Meanwhile, the onshore yuan rose 194 basis points to 6.9138 against the US dollar, as China's central bank moved to shore up the yuan with a stronger-than-expected fixing and a planned bond sale in Hong Kong.

The People's Bank of China set its reference rate at 6.8930 per dollar yesterday, 0.2 percent higher than the average forecast of 6.9089.

The strong bias in the daily fix is the largest since Bloomberg started releasing the survey estimates in August 2017.

The benchmark US greenback gauge reached the highest in a month, recovering from a painful rout in May.

Elsewhere, the Chinese city of Enshi has moved to stabilize house prices amid a worrying property slump by urging developers to stop drastic price cuts, threatening punishing measures unless such "wrong behaviors" stopped.

Developers have slashed prices at some estate projects in Enshi, a small city with less than one million in the central province of Hubei, as many new projects further strained an already slowing market, according to a three-page document issued by the Enshi Real Estate Association to its members seen by Reuters on Tuesday. Enshi housing bureau confirmed the authenticity of the document.

In other news, China's domestic phone shipment rose 1.2 percent year-on-year to 38.29 million units in May, up 48 percent on a monthly basis, according to date from China Academy of Information and Communications Technology.

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