Imported Car Probe May Benefit Dealers and Harm Automakers
China's probe into the pricing of imported cars could benefit dealers and hurt midrange local automakers, JPMorgan said in its China/Hong Kong Daily Views report. Tariffs, value added tax and consumption tax reportedly account for a combined 30-40% of an imported car's retail price in China. Dealers would benefit from higher sales volume and see limited impact on margin as their margin is fixed by automakers, while midrange automakers might be hit hard by substitution effect as the prices of imported cars would fall.
China to Step Up Corn Imports
China will step up grain imports to meet rising domestic demand, agriculture minister Han Changfu said. China will gradually increase corn imports, driven by growing demand for animal feeds following larger consumption of meat and eggs, Han said. Han's latest remarks stood in stark contrast to what he said a year ago that China should rely on itself for corn supply as opposed to the country's huge soybean imports. China's soybean imports currently account for 60% of the world's soybean shipments.
Service Sector Weakens
China's non-manufacturing purchasing managers' index fell to 53.9 in August from 54.1 in July, according to joint figures from the National Bureau of Statistics and the China Federation of Logistics & Purchasing. The weaker service sector was compared to a recovery in the manufacturing sector, whose index climbed to a 16-month high of 51 in August.
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