Economic Observer Online
May 18, 2012
Translated by Song Chunling
Original article: [Chinese]

The standing committee of the State Council has approved a 6 billion yuan investment to promote fuel-efficient cars with engine capacity of less than 1.6 liters.

It follows in the tradition of policies introduced in the 2009, when subsidies totaled 10 billion yuan and one program encouraged car buying in rural areas and another supported trade-ins. They particularly benefited Chinese brands, but the whole market has suffered since the support programs expired in 2010.

Chinese automotive consultancy CPCA, expects China’s car market to grow by between 7 percent and 10 percent this year.

Market analysts think the 6 billion yuan subsidy will be a great promotion for the current market, although that is less than the annual 10 billion yuan in 2009.