China to tighten green car sub­sidy pro­gram fol­low­ing cheat­ing scan­dal

China Daily (Canada) - - BUSINESS - By REUTERS

China will raise tech­ni­cal re­quire­ments for green en­ergy cars to re­ceive sub­si­dies and make awards retroac­tive rather than at the time of pur­chase, as it tries to rein in wide­spread cheat­ing by au­tomak­ers un­cov­ered ear­lier this year.

China has spent heav­ily on its green car sub­si­dies, $4.5 bil­lion last year alone, to com­bat heavy pol­lu­tion which af­fects large swathes of the coun­try and as a means for the Chi­nese au­to­mo­tive in­dus­try to catch up to global com­peti­tors.

The pro­gram helped quadru­ple sales of elec­tric and plug-in hy­brid cars in 2015 and fu­eled a 60 per­cent jump this year, but it also spurred fraud. China has so far ac­cused five au­tomak­ers of break­ing rules on green car sub­si­dies and al­luded to more vi­o­la­tions by un­named firms, while State me­dia has re­ported the names of a fur­ther twenty.

“(The cheat­ing) has at­tracted a high de­gree of at­ten­tion from all of so­ci­ety and even the in­ter­na­tional au­to­mo­tive in­dus­try with the State Coun­cil at­tach­ing great im­por­tance to de­mand­ing that acts of cheat­ing be se­ri­ously in­ves­ti­gated and dealt with,” the Min­istry of In­dus­try and In­for­ma­tion Tech­nol­ogy said in a state­ment onWed­nes­day.

China will soon is­sue a pol­icy mak­ing a va­ri­ety of ad­just­ments to the pro­gram, in­clud­ing set­ting up­per lim­its on lo­cal and cen­tral sub­si­dies, the min­istry said, adding sub­si­dies will be re­warded retroac­tively and the gov­ern­ment will strengthen the ap­pli­ca­tion and in­spec­tion pro­ce­dure.

The min­istry said it would par­tic­u­larly change re­quire­ments for coach buses and spe­cial-use ve­hi­cles.

The Min­istry of Fi­nance an­nounced re­sults of a probe into sub­sidy cheat­ing in Septem­ber, with vi­o­la­tions par­tic­u­larly preva­lent among bus mak­ers.

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