China formulates national smart car industry strategy

China is working on a national strategy on smart cars, and mulls banning production and sales of fossil fuel cars, according to policy makers attending a forum on automotive industry development.

With the global auto industry leaning toward intelligent and electric vehicles, work has begun on a timetable to ban manufacture and sales of traditional energy cars, according to Xin Guobin, vice minister of industry and information technology.

He told a forum in Tianjin that auto-makers should have a thorough understanding of the situation and readjust their strategies.

The Ministry of Industry and Information Technology (MIIT) will work out the timetable, Xin said.

Producing and selling 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.

Also 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.

He said the time period up to 2025 will be critical for the auto industry. Energy-saving and emission reduction requirements are increasing, the development of new energy vehicles is becoming more technically demanding and intelligent vehicles are expected to have a profound effect on the industry.