China’s “zero-kilometer used cars” exported to Central Asia spark trade disputes
Although China has surpassed Japan to become the world’s largest automobile exporter, there is a controversial trade strategy behind it – registering new vehicles as “used cars” and exporting them to markets such as Central Asia, Russia and the Middle East.
A Reuters investigation showed that these so-called “zero-kilometer used cars” are actually new cars that have not been driven and are exported immediately after being briefly registered in China. This model not only helps automakers digest inventory, but also enhances the performance of local governments.
Policy-driven export boom
Government-enterprise cooperation: At least 20 provincial governments, including Guangdong and Sichuan, support the model by issuing additional export licenses, tax exemptions, and building border storage facilities.
These measures are in line with national macroeconomic goals and have become a tool for local officials to highlight their achievements through export data. Data bubble: Industry experts pointed out that the domestic price war that lasted for four years forced automakers to “do whatever it takes” to meet sales targets.
Zhu Huarong, chairman of Changan Automobile, warned that such operations could damage the international image of Chinese auto brands.
Strategic layout of the Central Asian market
Fuel vehicle transfer depression: As China transitions to electric vehicles, a large number of fuel vehicles are pouring into Central Asia through channels such as the Horgos Port.
In 2024, the Horgos Port alone will export more than 400,000 commercial vehicles, of which 60% are second-hand vehicles (including “zero-kilometer” vehicles).
Electric vehicle subsidy arbitrage: William Ng, international director of Chongqing Huanyu Automobile, revealed that an electric car purchased for 40,000 yuan can make a profit of 10,000 yuan through exports to Central Asia between 2022 and 2023.
But the market is in “chaos” due to the influx of small dealers and even live-streaming car sellers.
Regulatory countermeasures and industry concerns
Importing countries tighten policies: Russia has banned brands with authorized dealers from importing “zero-kilometer used cars”; Middle Eastern countries such as Jordan have redefined “used car” standards to plug loopholes.
Data authenticity crisis: AutoXing founder Xing Lei questioned the credibility of industry data: “How much is real sales? How much is inflated data? No one knows.”
The Deep Logic of Geo-economic Game
Overcapacity outlet: China’s annual automobile production reaches 27 million vehicles (2024 data), of which about 5.86 million are exported.
Converting unsold new cars into “used cars” for export not only eases domestic inventory pressure, but also provides low-price options for Central Asian consumers. New battlefield for great power competition: As the United States is deeply mired in the Middle East and Russia is trapped in the Ukrainian war, China strengthens its strategic connection with Central Asia through economic ties such as automobile exports. The signing of the “Permanent Good-Neighborly Friendship and Cooperation Treaty” at the second China-Central Asia Summit in 2025 further consolidates the political basis for this economic penetration.
The institutional root of the controversy: Under the framework of the central government’s assessment of local GDP, export volume and other indicators, such “flexible” practices are tacitly regarded as a shortcut to achieve the goal.
Although it may damage the industry’s reputation in the long run, in the current strategic window period, this model will continue to provide gray power for China’s automobile “going out”.
