China prepares $29 billion for green car projects

Chinese government proposed a package of more than 200 billion yuan ($29 billion) for development of new energy cars before 2012, a state official said Thursday at an economic meeting as reported by Beijing based Jinghua newspaper.

Initially the money will be used to subsidize development, promotion and maintenance of new energy vehicles in public transportation, public services & facilities and postal services, and then it will be expanded into private car sector, said Wang Baoan, Director of General office of the Ministry of Finance.

The country has already decided to put 60,000 domestically made new-energy vehicles on trial run in 11 cities in the next few years, as reported by medias.

Wang said the ministry also plans to offer preferential tax policies for automakers who develop fuel efficient cars and consumers who buy low-carbon green cars will get more subsidy than those who choose less efficient cars.

China's top economic planning body - China National Development and Reform Commission said on Thursday that the commission is discussing measures to reform the current fuel taxation and pricing in an effort to stimulate consumption on fuel efficient vehicles.