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Real-time News
On December 8th, the China Passenger Car Association (CPCA) stated that due to strong subsidies for trade-ins, the scale of car trade-ins in 2025 is expected to exceed 180 billion yuan. Furthermore, the 10% purchase tax reduction for new energy vehicles (NEVs) will benefit 22% more sales than in 2024, meaning that over 200 billion yuan in purchase tax will be exempted from the 2 trillion yuan in NEV sales. Therefore, with nearly 400 billion yuan in tax exemptions and subsidies, the car market is expected to grow beyond expectations in 2025. However, in 2026, the 5% purchase tax reduction for NEVs alone will result in a loss of over 100 billion yuan in tax relief, putting significant pressure on car market growth. Considering the desire for a good start to the 15th Five-Year Plan, a more stable approach is expected at the end of 2025, avoiding excessive use of next years growth potential.The Hang Seng Index closed down 319.72 points, or 1.23%, at 25,765.36 on Monday, December 8; the Hang Seng Tech Index closed up 0.09 points, or 0.0%, at 5,662.55; the H-share Index closed down 114.77 points, or 1.25%, at 9,083.53; and the Red Chip Index closed down 41.95 points, or 0.98%, at 4,218.28.On December 8th, the China Passenger Car Association (CPCA) stated that the hollowing out of profits in the automotive industry is a very serious trend, with upstream profit erosion being severe. While various regions have vigorously promoted the implementation of "new infrastructure" policies, effectively releasing domestic demand and the expansion of the trade-in program for consumer goods have yielded significant results, the automotive industrys profit improvement has lagged significantly behind other consumer goods. As the national anti-involution effort continues, the automotive industrys profits have contracted due to factors such as profit margins exceeding 30% in the non-ferrous metal mining and beneficiation industry, substantial profit improvements in the upstream steel industry, high profits in the battery industry, and the high costs associated with intelligent driving, while upstream companies in the supply chain have seen relatively good profit performance.Hong Kong stocks closed lower, with the Hang Seng Index down 1.23% and the Tech Index flat. Baidu (09888.HK) bucked the trend, rising 3.45%. Consumer stocks were weak, with Pop Mart (09992.HK) falling 8.5% and Laopu Gold (06181.HK) falling 6.7%.December 8th - The US dollar weakened today as markets await the Federal Reserves policy decision this week, with widespread expectations of another interest rate cut. Deutsche Bank analysts stated in a report that the Fed may announce its third and final 25-basis-point rate cut of 2025 on Wednesday, and this decision is unlikely to be unanimously approved. Analysts indicated that Chairman Powells press conference and accompanying statement will be crucial. "We expect Powell to emphasize that the threshold for further rate cuts in early 2026 is high, signaling a short-term pause in rate cuts."
