On Jan. 1, China started offering higher subsidies to vehicle owners who trade in their old vehicles for new clean ones, between 5,000 yuan ($732) and 18,000 yuan per unit, to boost new vehicle sales and help cut emissions, Xinhua News reported.
Since August 2009, China has been accepting old cars in exchange for subsidies on new car purchases. Initially, the trade-in subsidy for each clean model was 3,000-6,000 yuan. Now, the maximum of the subsidy has been tripled to 18,000 yuan.

Under the new policy jointly announced by the finance ministry and commerce ministry, the subsidy is 18,000 yuan for a heavy truck, 13,000 yuan for a medium-sized truck, 9,000 yuan for a light truck and yuan 6,000 for a mini truck.

The subsidies for passenger cars are 18,000 yuan for a large car, 11,000 yuan for a medium-sized car, 7,000 yuan for a small car, and 5,000 yuan for a mini car. The subsidy is yuan 18,000 for a sedan with a 1.35-liter engine, 10,000 yuan for a sedan of 1.0-1.35 liters and 6,000 for a sedan of less than 1.0 liter.

Mwanwhile, China has raised the auto sales tax rate from 5% to 7.5% for passenger cars with an engine size of 1.6 liters or less, also effective on Jan. 1. The government previously halved the small-car sales tax to 5% one year ago.

This new subsidy policy will speed up trade-ins of old cars and help China reach its target for cutting emissions. At the same time, car owners will buy new cars and boost the auto market.