Paying Farmers In China “Cash Back” Deals To Buy Cars

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China has come up with another economic stimulus idea worthy or emulation by the US.

The central government in the world’s most populous nation will give farmers a credit if they buy new light trucks of minivans. The “cash back” deal is worth almost $1,000 for each vehicle.

The plan may actually have a windfall for GM. According to the AP, “General Motors Corp.’s mini vehicle joint venture, SAIC-GM-Wuling, which claims about a 50 percent share of the Chinese market for such vehicles, will likely be one of the biggest beneficiaries from the plan.”

With its sales down almost 45% in the US market despite huge “cash back” offers for new car buyers, there is plenty of evidence that the program in China won’t work.

Douglas A. McIntyre