CHINA’S top economic planner said Thursday it had not considered reducing the vehicle purchase tax, seemingly pouring cold water on industry hopes that the government might cut the tariff by half to shore up the flagging auto market.

Meng Wei, spokeswoman for the National Development and Reform Commission (NDRC), said the world’s largest auto market was feeling major pressure but that the slowdown could actually help weed out weaker players.

“Objectively, this [slowdown] could help stimulate the workings of the market, strengthen the industry’s core competitiveness and eradicate outmoded capacity,” Wei told a press conference in Beijing.

“Currently, our commission has not considered or proposed the idea of ‘cutting the purchase tax to 5 percent’,” she added. The purchase tax rate is currently 10 percent.

China’s car market is on the brink of an annual contraction not seen since 1990 after sales fell 11.7 percent in October, the fourth straight month of declines.

Reuters reported in October that China’s car dealers, hit hard by the slowdown, were pushing the government to help prop up the sector, including a proposal to authorities to cut the level of purchase tax on some smaller cars in half.

Bloomberg also reported late last month that China’s top economic planning body was proposing to cut the tax levied on car purchases by half, as the impact of an escalating trade war with the United States threatens to slow the Chinese economy and affect demand for vehicles.

China’s auto market grew 3 percent last year, according to industry body the China Association of Automobile Manufacturers (CAAM), but was still sharply down from a 13.7 percent gain in 2016 that was aided by a purchase tax cut on smaller cars. (SD-Agencies)