China to subsidise purchases of green vehicles

China said Tuesday it would subsidise purchases of alternative energy vehicles in five cities amid efforts to reduce emissions, save energy and spur the development of green technology.

The government will offer buyers subsidies of up to 50,000 yuan (7,300 dollars) for plug-in hybrid passenger cars and 60,000 yuan for pure electric vehicles, the finance ministry said on its website.

The long-awaited subsidy programme will be trialled in Shanghai, the northeastern city of Changchun, the southern city of Shenzhen and the eastern cities of Hangzhou and Hefei, the statement said.

The government did not say when the trials would begin or how long they would last.

Alarmed by worsening pollution and a soaring reliance on oil, China is pushing green energy technologies, saying it wants sales of such vehicles to account for 10-15 percent of total sales by 2020.

China last year overtook the United States to become the world's biggest auto market.

The government had been expected in January to announce subsidies for alternative-energy vehicles that would make them more affordable for price-sensitive Chinese consumers.

However, Beijing reportedly delayed the announcement to seek further input from automakers.

(c) 2010 AFP