Green light given to eco-friendly vehicles
By Gong Zhengzheng (China Daily)
Updated: 2006-01-05 06:07

The central government yesterday issued a notice to encourage the use of environmentally-friendly, low- emission cars.

All restrictions on such small cars must be lifted before the end of March, it said.

Low-emission Cherry vehicles are on display in an auto market in Beijing in this file photo. [newsphoto]

"It will help alleviate energy shortages and protect the environment, as well as foster brands in China's automotive industry," the notice said.

The notice called on manufacturers to invest more in development and production of environmentally-friendly and low-emission engines and automobiles, such as small cars, diesel-powered vehicles and those using new fuel sources.

The notice urged government departments to use tax breaks and preferential oil-pricing policies to encourage consumers to buy such cars.

Industry sources said regulators are creating a new auto consumption tax scheme, which will slash taxes on low-emission vehicles while raising charges on high-emission vehicles.

For example, consumption taxes on less-than-1.0-litre vehicles will be lowered to 1 per cent from 3 per cent. In contrast, the taxes on larger-than-3.0-litre automobiles are likely to rise to 14-20 per cent from 8 per cent.

The government notice advocated lower parking charges for small vehicles.

It also demanded government departments remove all limitations on the use of small cars in the transportation and taxi sectors.

Currently, 84 Chinese cities curb the purchase and use of small cars using all kinds of excuses, such as bad image and traffic jams.

In Guangzhou, capital of South China's Guangdong Province, less-than-1.0-litre cars have been banned from having licence plates since August 2001.

Industry experts and manufacturers welcomed the news.

"We have been waiting for this policy for a long time," said Zhu Yiping, an official from the China Association of Automobile Manufacturers.

He added that small cars have been one of the mainstays of China's domestic auto industry.