In many developed countries sales are down. In China experts say sales growth is due to government incentives. Official forecast for 2009 predicts 8 per cent growth.

Shanghai (AsiaNews/Agencies) – Mainland's auto sales soared 36.5 per cent in June from a year earlier to 1.14 million vehicles. China’s passenger-vehicle sales alone rose 48 per cent. But this was made possible by government incentives, an industry group said, not any structural upswing of the sector.

Total sales for the first half of the year were 6.1 million vehicles, up 17.7 per cent from a year earlier and a six-month record, the China Association of Automobile Manufacturers (CAAM) said.

By contrast, vehicle sales dropped in North America and other developed countries. In the United States sales plunged 35 per cent in the first half to 4.8 million, to an annual rate of 9.69 million cars and light trucks in June. This means that China’s automotive sector outpaced that of the United States. However, for CAAM this shift is the result of sales tax cuts, government subsidies to trade in older cars and other incentives.

Whether strong sales will continue after government help ends is another story. The sector is in fact still weak because foreign sales and exports remain low.

Overall in the mainland's Pearl River Delta some 55,200 Hong Kong-owned factories produce, assemble or process consumer goods for export. But a drop in exports has forced many of them to go bust.

Despite the situation the authorities remain optimistic about renewed growth.

As a result of government and domestic spending, the mainland economy should grow at about eight per cent this year, this according to a report by the State Information Centre under the National Development and Reform Commission.

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