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  PlanetArk 6 Jan 06
China Welcomes Small Cars Back to its Streets

BEIJING - China will encourage the manufacture and use of small, low-emission cars, overturning current restrictions on them to help curb its growing appetite for oil, the country's top economic planning body said.

Parking fees for small cars should be lower, officials should lead the way in using them and limits on their use as taxis should be lifted, the National Development and Reform Commission said in a statement on its Web site.

"The safety, power and appearance of energy saving and environmentally friendly low-emission cars have all improved greatly," the commission said, adding that all restrictions should be lifted by March 1.

China would also promote the development of cars that use fuels other than gasoline and diesel and draft tax policies to coax customers towards smaller and more efficient vehicles.

At present 84 Chinese cities restricted the purchase and use of small cars, the China Daily said. Authorities in the southern export hub of Guangzhou had stopped issuing license plates for cars with engines under 1.0 litre in 2001.

The commission said small cars had been discouraged because of "noise and air pollution, poor safety and unattractive appearance". But as oil prices rise, the appetite for smaller cars had been growing - those with under 1.6 litre capacity had accounted for 66 percent of sales of domestically made vehicles in the first 11 months of last year - and car makers were keen to capitalise on the opportunities the new policy offers, the China Daily said.

Domestic small-car specialist Chery Automobile Co. expected to do much better business and planned to launch more low-emission models, the paper quoted sales manager Qing Lihong as saying.

China imports more than 40 percent of its crude oil.

Channel NewsAsia 5 Jan 06
China pushes for smaller cars as environmental concerns grow

BEIJING - China has begun a push to promote small, low-emission cars as oil prices remain high and environmental concerns grow over the nation's fast-rising auto culture, state press reported Thursday.

The central government this week issued a notice calling on local authorities around the nation to lift restrictions on so-called "environmentally friendly" cars, the China Daily said.

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

Currently, 84 Chinese cities restrict the purchase and use of small cars, which are banned in many places from entering main roads and motorways.

The curbs were originally put in place partly to stop an explosion of ultra-cheap vehicles hitting the nation's roads. Local governments fear allowing a free-for-all on small cars will lead to a worsening of the already increasingly bad traffic jam problems. The government notice called for local authorities to lower parking charges for small cars, and demanded all restrictions on those vehicles being used in the taxi and transport industries be removed.

Manufacturers have also been urged to invest more in diesel-powered vehicles and those that use "new fuel sources", the China Daily said, in an apparent reference to low-carbon emission engines that are making tentative inroads in Western markets.

China's relatively new auto industry, which is starting to develop vehicles for export as well as the domestic market, welcomed the new measures. "We have been waiting for this policy for a long time," the China Daily quoted Zhu Yiping, an official from the China Association of Automobile Manufacturers, as saying.

The China Daily said the government was also considering creating a new tax system for the auto industry that would promote low-emission cars and penalise large, petrol-guzzling vehicles. Consumption taxes on vehicles with engines smaller than one litre may be cut from three to one percent, while takes on engines bigger than three litres are likely to rise from eight percent to 14-20 percent, the paper said.

The number of private cars on China's roads has nearly tripled in five years, with previously released government data showing there were around 17 million last year, up from 6.25 million in 2000. - AFP/ir
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