China Advances Auto Replacement Subsidy Plan

BEIJING, June 30 -- The Chinese government has released the draft of a plan for auto replacement to solicit public opinion, sources reported.

    According to the draft, during the period from Jun. 1, 2009 to May 31, 2010, consumers can acquire subsidies ranging from RMB 3000 to RMB 6000 to replace their old vehicles.

    The subsidy program covers light trucks and mid-sized taxis with less than eight years of use and medium- and small-sized trucks and mid-sized passenger cars with less than 12 years of use, according to a bulletin jointly issued by the Ministry of Commerce (MOC) and the Ministry of Finance (MOF) on Friday.

    Owners of vehicles that fail to meet the European No. 1 standard for exhaust emissions can also get replacement subsidies even if the vehicles are not scrapped. The subsidy will be no more than the sales tax on an auto of the same type.

    The move is part of the government's effort to stimulate private spending, expand domestic demand and curb pollution.

    The government will soon launch draft plans that simplify the procedures for replacement and shorten the time it takes for consumers to obtain the subsidy.

    (Source: China Knowledge)