China allocates US$949 million for direct consumer subsidies

China’s central government will invest 6 billion yuan (US$949 million) to subsidize consumer purchases of fuel-saving cars, according to the official Xinhua News Agency. Two years ago, the government started offering a 3,000 yuan (US$474) rebate on consumer purchases of small, fuel-efficient cars. Last September, the government raised the bar by making the subsidy available only to purchasers of cars with an engine displacement of 1.6 or smaller, that consume 6.3 liters of gasoline or less per 100 km, compared with the previous limit of 6.9 liters. The government has also incentivized its fledgling electric car industry with subsidies of up to 60,000 yuan (US$9,490) for each vehicle sold. A green vehicle development plan approved by the State Council in April set a cumulative output target of 5 million hybrid and electric vehicles (EV) by 2020.