China approves stimulus plan for auto, steel industries

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Source: CCTV.com | 01-15-2009 09:06

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The State Council has approved a stimulus plan aimed at reviving the country's automobile and steel industries.

In the automobile sector, the top priority is increasing  consumer demand.

The unfolding financial crisis has already pulled many economic sectors into a downturn including the steel and auto industries.

Growth in both sectors has tumbled to a ten-year low.

On Wednesday, the State Council approved a plan to prop up the two industries.

In the automobile sector, the top priority is increasing consumer demand. To encourage car sales, the state council will reduce the vehicle purchasing tax to five percent on cars with engine capacity below 1.6 liters this year. And 5 billion yuan of subsidies will be allocated to farmers and drivers who trade in their old vehicles for new ones.