More domestic brand cars for govt officials

• Source: Global Times
• [14:26 January 20 2011]
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By Guo Qiang

Chinese authorities are mulling new regulations to increase the ratio of domestic brands cars to more than 50 percent in government procurement of official cars, despite the fact that Western business chambers are increasingly concerned about so called "Buy China" policies.

The annual car-purchasing bill of the Chinese government is expected to top 100 billion yuan ($14.7 billion) in 2010, a huge cake for Chinese and foreign car brands to compete for.

The Financial Ministry, Government Offices Administration and the CPC Central Commission for Discipline Inspection have been jointly drafting a regulation to specify standards and prices of domestic cars, China Business News (CBN) reported Wednesday.

Based on the State Council's plan earlier this year to push for the preferential policy for domestic car brands, a meeting of China's top legislature, the NPC, which concluded last Saturday, reiterated the government's resolve to increase the ratio of China-made cars to more than half.

Under the new regulation, ordinary vehicles of all government departments nationwide should have an engine displacement of up to 1.8 litters and a price below 160,000 yuan, compared with current regulations effected in 1994 for an engine displacement up to 2.0 litters and a price of up to 250,000 yuan.

This policy is deemed as preferential to domestic brands, that enjoy a competitive edge in producing economic cars.

Ministers and provincial heads should have cars with an engine displacement of up to 3.0 liters and a price below 450,000 yuan. For a vice minister-level official, the car should be priced below 350,000 yuan, according to the 1994 regulations.

Statistics indicate that official-vehicle expenses at all levels last year reached 80 billion yuan ($11.7 billion), 14 percent of the total amount of expenses of government purchase. And the figures could jump to 100 billion yuan ($14.6 billion) next year.