It has been announced that a set of tax cuts aimed at encouraging the growth of the Chinese automobile market has been approved by the country's State Council.
The announcement was made following a Cabinet meeting on January 14, and will see the implementation of measures aimed at stimulating the purchase of cars and the reduction of costs for manufacturers of energy-efficient vehicle technology.
Under the new regime, the government will cut the current 10% tax levied on purchases of vehicles with engine capacities of 1.6 litres and below to 5%, with effect from January 20. The tax concession will run for the duration of 2009.
Additionally, the government will offer a one-off cash bonus to individuals willing to trade their high-emission vehicles in for more environmentally friendly replacements.
Growth in China's auto sector, one of the pillars of its economy, has slowed considerably since the onset of the economic downturn, with growth in vehicle sales falling to about 7% in 2008 – the first time it has slipped below 10% for a decade.
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