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China Promotes New-Energy and Small Cars

A recent State Council executive meeting has decided that vehicle purchase tax on passenger cars with less than 1.6 litre engines will be halved from 1 October 2015 to 31 December 2016.

The meeting agreed that promoting the development of new-energy and small-engine cars and eliminating vehicles with excessive emissions can help alleviate energy and environmental pressures, propel structural optimisation and consumption upgrade of the automotive industry, as well as foster new economic growth poles.

The meeting resolved that:

First, efforts will be made to improve policies encouraging the development of new-energy cars, support the research and development of battery-powered and fuel-cell vehicles, and set up demonstration pilots for smart connected vehicles. State organs, enterprises and institutions are required to meet the percentage requirement for the share of new-energy cars in their vehicle replacement, and increase efforts in evaluating the percentage of new-energy cars in their newly added or replaced official vehicles. Regions failing to meet the set targets are subject to cuts in subsidies for fuel and operation. Action will be taken to encourage innovation of operation modes such as leasing by the hour and vehicle sharing. Regions are not allowed to restrict the running and purchase of new-energy cars; in places where such restrictions are in place, they must be lifted.

Second, vehicle purchase tax of passenger cars with less than 1.6 litre engines will be halved from 1 October 2015 to 31 December 2016.

Third, steps will be taken to phase out the so-called yellow label vehicles and launch clean-up and rectification campaigns. In provinces where progress of these campaigns lags seriously behind, greater pressure will be exerted to improve accountability. On the basis of existing funding support, local governments are allowed to use fiscal reserve to carry out the work. Action will be taken to ensure that the task of eliminating yellow label vehicles will be basically completed by 2017.

Content provided by Picture: HKTDC Research
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