For the past two decades, the real estate sector has been the most important engine of China’s economic growth. But in the view of one of China’s most prominent economists, the fast-growing new energy vehicle (NEV) sector is poised to replace it.
Ren Zeping, the chief economist at Soochow Securities, said that the NEV industry will be the most promising sector to replace the real estate, heavy industry, and chemical sectors, according to a release on the website of state-owned media China National Radio.
Ren was chief economist at real estate developer Evergrande Group before joining Soochow Securities. He made the comments at an event today on investment in the NEV industry chain.
Although the NEV industry currently contributes less than a tenth of what real estate does to the economy, it is growing at a very fast pace, Ren said.
The NEV industry is growing at a rapid pace, bringing a fast-growing penetration rate, and considering the market size of the industries associated with it, a large number of fuel vehicles will be replaced by NEVs in the next decade or longer, he said.
Separately, Xinhua News Agency quoted Ren in an article published today that the new economy, new infrastructure and new energy will become the new growth points of China’s economy.
Especially new energy, it will bring an RMB trillion market and become the most promising industry, he said.
The real estate sector remains the backbone of China’s economy for now, despite the measures taken by many Chinese cities to restrict purchases in an effort to control rising home prices.
Data released earlier this month by China’s National Bureau of Statistics showed that from January to November, sales of commercial properties in China reached RMB 16.17 trillion, up 8.5 percent.
By way of comparison, the new energy vehicle industry is currently only an emerging sector, with data released earlier this month by the China Passenger Car Association showing that the retail sales of NEVs in China from January to November reached 2.154 million units, up 178.3 percent year-on-year.