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China Offers Incentives to Stimulate Hybrid Cars

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China is to offer policy incentives to speed up spread of energy-saving cars in 13 pilot cities.

The ministries of finance and science and technology jointly issued a circular on providing subsidies to users of hybrid, electric and fuel cell cars in Beijing, Shanghai and another 11 major cities, the Ministry of Finance said on its website on Sunday.

Public transport, taxi companies, post services and public offices were encouraged to use more energy-saving vehicles, the circular said.

The government promised to give companies and institutions, which purchase and use such vehicles, lump sum subsidies to offset their extra cost on fuelling efficient cars than ordinary ones.

Meanwhile, the central government urged local governments to subsidize the development and maintenance of energy-friendly cars.

This is considered the boldest measure the central government has ever taken to stimulate promotion of hybrid cars although the subsidies have yet to extend to private car users.

Due to much higher price tags on them, hybrid cars encountered cold shoulders in thriving domestic car market over the past few years.

While introducing mature hybrid products into the public transportation sector before the Beijing Olympic Games in 2008, China also adjusted its research and development plans as well as car industry policies in terms of spreading fuel-efficient engines and vehicles.

Long trained as a technologist in a German auto company, Minister of Science and Technology Wan Gang is an avid advocate for hybrid cars, and his ministry plays a key role in technological upgrading.

(Xinhua News Agency January 31, 2009)

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