China Set to Ban Petrol, Diesel Cars

Chinese authorities said they are developing a national strategy on smart cars and are considering banning the production and sale of diesel and petrol cars and vans.

The country’s Vice Industry and information technology Minister Xin Guobin, told a forum on automotive industry development in Tianjin that the plan had started with “relevant research” but that it had not yet decided when the ban would come into force.

He said his ministry will work out the timetable. China made and sold more than 28 million vehicles in 2016, the eighth year as the world’s biggest producer and manufacturer. China’s auto industry contributed at least one tenth of total retail sales of consumer goods.

China also leads as the largest producer and market for new energy vehicles. More than 500,000 of them were built and sold last year. There are more than 1 million new energy vehicles on the road, or half of the world total.

To encourage development of new energy vehicles, subsidies of as much as half of the original price are available, but in the long term, such subsidies may lead to blind expansion by auto makers, said Song Qiuling, a deputy section chief from the Ministry of Finance, at the forum.

Subsidies will gradually be reduced and a new energy credit policy introduced, according to Song.

On June 13, the MIIT released a policy document for public opinion on fuel consumption control and new energy vehicle credits, requiring auto-makers to meet a new energy credit ratio of 8 percent in 2018, 10 percent in 2019, and 12 percent in 2020, to ease pressure on energy and environment. Xin confirmed that the policy would be put into effect in the near future.

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