Doping therapy: Chinese authorities will calm the Russian car market
- July 21, 2023
- 0
The sharp depreciation of the ruble over the past one and a half to two months has become one of the main reasons for the imminent sharp rise
The sharp depreciation of the ruble over the past one and a half to two months has become one of the main reasons for the imminent sharp rise in car prices in the Russian market. But this process will not be stopped by the Russian Central Bank (as it should have been), but by the results of the decisions of the Chinese economic authorities.
According to the Central Bank, for objective reasons, the ruble is doomed to fall, imported cars to rise in price and the country’s car market to dry out. As a result of this approach, the ruble has fallen by more than 16% against the dollar since the beginning of the year. And most analysts now agree that in August, price tags for new foreign cars in Russia will increase by about 13%.
Meanwhile, in the spring of 2022, as Western economic sanctions rained down on Russia, central bank officials managed to effectively and swiftly restrict the withdrawal of foreign currency abroad and force exporters to sell their proceeds (dollars and euros) in the domestic Russian market. As a result, the ruble could not fall. And now they have suddenly lost the desire to do what they can and should do in a similar situation. I’m ashamed to say it, but it seems that all that needs to be done for them … China! According to the Central Bank, little money is flowing to us because oil and gas are now relatively cheap on world markets – about $80 a barrel. Mainly because there is not really good demand for it.
After all, contrary to expectations six months ago, the economy of the Celestial Empire, after dropping the restrictions of the coronavirus, did not rush forward and upward, but moved lazily and staggering along this path. Therefore, the demand for hydrocarbons in the world is relatively small. The Chinese authorities also do not like the weak growth of national GDP.
This is evident from the instructions that China’s National Development and Reform Commission has just published to departments and provincial authorities. The document is intended to greatly stimulate the country’s economy. It instructs authorities at all levels to create the most favorable conditions for the purchase by citizens of the country of all kinds of “consumer goods”: electronics, vehicles, food, building materials – everything.
Particular emphasis is placed on encouraging the purchase of environmentally friendly goods (including electric vehicles). And not only by inhabitants of megacities, but also by millions of inhabitants of the Chinese hinterland, to whom the wonders of technology arrive with great delay. It is clear that the implementation of this party-state “pointer” will not happen tomorrow. Knowing China’s system of public administration and close interaction with business, there is no doubt that consumer demand will receive strong doping from various directions in the very near future.
To meet this demand, China needs a breakthrough in the production of literally everything. We will therefore not be surprised if Chinese industry starts to demand radically large amounts of raw materials, mainly oil and gas, in the coming months. World hydrocarbon prices will inevitably rise, ensuring the influx of foreign currency to Russia. What should (in theory) if not strengthen the ruble, then stop its devaluation – certainly. And with it the prices of imported cars.
globallookpress.com’s photo
According to the Central Bank, for objective reasons, the ruble is doomed to fall, imported cars to rise in price and the country’s car market to dry out. As a result of this approach, the ruble has fallen by more than 16% against the dollar since the start of the year. And most analysts now agree that in August, price tags for new foreign cars in Russia will increase by about 13%.
Meanwhile, in the spring of 2022, as Western economic sanctions rained down on Russia, central bank officials managed to effectively and swiftly restrict the withdrawal of foreign currency abroad and force exporters to sell their proceeds (dollars and euros) in the domestic Russian market. As a result, the ruble could not fall. And now they have suddenly lost the desire to do what they can and should do in a similar situation. I’m ashamed to say it, but it seems that all that needs to be done for them … China! According to the Central Bank, little money is flowing to us because oil and gas are now relatively cheap on world markets – about $80 a barrel. Mainly because there is not really good demand for it.
After all, contrary to expectations six months ago, the economy of the Celestial Empire, after dropping the restrictions of the coronavirus, did not rush forward and upward, but moved lazily and staggering along this path. Therefore, the demand for hydrocarbons in the world is relatively small. The Chinese authorities also do not like the weak growth of national GDP.
This is evident from the instructions that China’s National Development and Reform Commission has just published to departments and provincial authorities. The document is intended to greatly stimulate the country’s economy. It instructs authorities at all levels to create the most favorable conditions for the purchase by citizens of the country of all kinds of “consumer goods”: electronics, vehicles, food, building materials – everything.
Particular emphasis is placed on encouraging the purchase of environmentally friendly goods (including electric vehicles). And not only by inhabitants of megacities, but also by millions of inhabitants of the Chinese hinterland, to whom the wonders of technology arrive with great delay. It is clear that the implementation of this party-state “pointer” will not happen tomorrow. Knowing China’s system of public administration and close interaction with business, there is no doubt that consumer demand will receive powerful doping from various directions in the very near future.
To meet this demand, China needs a breakthrough in the production of literally everything. We will therefore not be surprised if Chinese industry will need radically large amounts of raw materials, mainly oil and gas, in the coming months. World hydrocarbon prices will inevitably rise, ensuring the influx of foreign currency to Russia. What should (in theory) if not strengthen the ruble, then certainly stop its devaluation – sure. And with it the prices of imported cars.
Source: Avto Vzglyad
Donald Salinas is an experienced automobile journalist and writer for Div Bracket. He brings his readers the latest news and developments from the world of automobiles, offering a unique and knowledgeable perspective on the latest trends and innovations in the automotive industry.
