BEIJING (Reuters) – Chinese authorities on Friday announced measures to boost sales of automobiles and electronics to support an economy struggling with a post-COVID recovery that has been slow to materialize.

Regions will be encouraged to increase annual car purchase quotas and efforts will be made to support sales of used vehicles, according to a statement released by 13 government agencies, including the National Development and Reform Commission, China’s economic planning body.

Amid a slowing economic recovery from the COVID-19 pandemic, authorities identified the automotive sector as a lever to support growth, unexpectedly extending a tax exemption on the purchase of so-called new energy vehicles (NEVs) until 2027.

Domestic demand remained weak, however, and the world’s biggest auto market is grappling with a price war sparked by Tesla in January, which has since spread to more than 40 brands.

In March, the China Association of Automobile Manufacturers (CAAM) urged the auto industry and authorities to limit price cuts to ensure the sector’s stable development.

“Localities should not implement protectionist policies and avoid vicious competition,” said the statement released Friday.

In another statement regarding the sale of electronic products, it said authorities should encourage scientific research institutes and market entities to actively apply Chinese artificial intelligence (AI) technology to improve the intelligence levels of electronic products.

These new announcements, similar to those presented in recent months, did not enthuse the market, which was disappointed by the weak growth of China in the second quarter and expected more stimulus measures.

(Reporting Qiaoyi Li, Liz Lee and Brenda Goh; with contributions from Jason Xue; Diana Mandiá, editing by Kate Entringer)

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