China welcomes small cars back to its streets

China will encourage the manufacture and use of small, low-emission cars, overturning current restrictions on them to help curb its growing appetite for oil (China imports more than 40% of its crude oil).

Parking fees for small cars should be lower, officials should lead the way in using them and limits on their use as taxis should be lifted, the National Development and Reform Commission, the country's top economic planning body, said. "The safety, power and appearance of energy saving and environmentally friendly low-emission cars have all improved greatly." China will also promote the development of cars that use fuels other than gasoline and diesel and draft tax policies to coax customers towards smaller and more efficient vehicles.

At present 84 Chinese cities restrict the purchase and use of small cars. Authorities in Guangzhou had stopped issuing license plates for cars with engines under 1.0 litre in 2001. The commission said small cars had been discouraged because of "noise and air pollution, poor safety and unattractive appearance". But as oil prices rise, the appetite for smaller cars has been growing - and car makers are keen to capitalise on the opportunities the new policy offers.

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