Monday saw big changes to taxes levied on vehicles across the country. Essentially, it's more tax for those driving bigger cars, and less for those with smaller cars. This is another move China is making to save energy and cut pollution as consumers become more aware of the environment.
The adjustment in the consumption tax has made a big difference in the race between big and small cars. Starting September first, big cars in China could face taxes as high as 40 percent. In contrast, the consumption tax for small cars, with engines 1 liter or smaller, is only 1 percent.
The different consumption taxes have affect people's preferences, as can be seen in this Beijing auto market.
The government says the adjustment of the tax will encourage a shift to more fuel-efficient cars. But China's car consumption had already shown some changes before the move. The fuel price hike in June made people reconsider before buying gas guzzlers. And social awareness of protecting the environment and saving energy is also improving.
The Chinese government has pledged to lower energy consumption per unit of GDP by 20 percent and to cut emissions of major pollutants by 10 percent during the 11th Five-Year Plan. China is one of the biggest and fastest growing auto markets. Automobiles account for about half of the country's oil consumption.
Experts say the government will continue to use macro-control measures to improve China's car consumption structure and realize its energy-saving and environmental-protection targets.
