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The Finance Ministry said on Saturday that the existing subsidy programme, which was to end in 2015, will now be extended “to preserve policy continuity”.
The current subsidies for 2013 ranged from 35,000 yuan ($5,730) for alternative-energy (electric or hybrid) to 60,000 yuan ($9,800) per passenger vehicle in 2013.
Buyers of electric buses and coaches received nearly $90,000 in subsidies last year.
“New-energy vehicles, especially buses, can help improve urban problems of pollution and noise and therefore everyone should be encouraged to use it,” Li said in late January.
Chinese authorities have been aggressively trying to tackle the problem of poor air quality in some of their major metropolitan areas.
The challenge is expansive, Chinese environmentalists have acknowledged.
In late November, the city of Lanzhou in northwestern China imposed a two-month vehicles restriction for fear of an air quality index which exceeds 100 while the PM2.5 concentration exceeds 75 micrograms per cubic metre.
An air quality index above 100 is considered unhealthy to sensitive persons, or those with breathing problems, such as asthma. Going over an index of 300 is hazardous, says the World Health Organisation.
In December, Beijing fined eight cities in the northeast province of Liaoning for failing to check the smog and haze resulting from pollution that has choked Chinese citizens.
The punitive fines, the first China’s environment body has imposed on local governments, came even as smog blanketed 100 Chinese cities across more than half the country last week.
Zhu Jinghai, Head of the provincial department of environment protection, said the funds gathered from the fines would aid the anti-pollution battle.