China bails out steelmakers and car industry

The Chinese government has announced a rescue package for its car makers and its steel industry in order to revive the faltering powerhouses of its economy.

Sales tax on all cars with engines below 1.6 litres will be halved to 5pc and 5 billion renminbi (£500m) will be set aside as incentives for rural families to trade in their old cars for new low-emission vehicles.

The government will also give the almost entirely state-run Chinese car industry 10 billion rmb to develop “alternative fuel vehicles” over the next three years. There was no mention of an earlier proposal to force the Chinese government to give up its Audi saloons for domestic motors.

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