China will issue policies to encourage low-emission economical cars, said a senior official with the National Development and Reform Commission (NDRC) on Monday.

Liu Zhi, director of the Department of Industrial Policy from the NDRC, made the remark at the 6th China/Asia Clean Fuels International Conference being held from Nov. 7 to 8.

According to the official, new policies will be issued soon to cancel local restrictions on low-emission cars to encourage higher economic efficiency.

"It is an important move of the government to balance the booming car industry of the country with its soaring energy demand," he said.

Liu said that the coming policy will stipulate a clear definition for economical cars as low-emission cars are not necessarily economical. Aside from low emission, an economical car should also meet some other requirements, he said.

Generally, it should be no more than four meters long, have below 1.4-litre emission and more advanced technologies, yet be within the purchasing power of ordinary people.

China should encourage environment-friendly small cars with less oil-consumption, he said.

However, to date small cars are still not allowed to run in over 80 cities of the country despite Chinese Primer Wen Jiabao's call for canceling restrictions on cars with low emission, low oil consumption and high efficiency this summer.

"It is unwise to restrict all small cars, not only those of low efficiency, but also efficient ones, especially in China, a country experiencing a booming car industry and suffering blame for its soaring oil demand," Liu said.

The new policies will also contain taxes preferential for producers and users of economical autos, said Liu.

Signals favoring low-emission, economical cars have been read from the market. According to statistics, the first nine months of this year witnessed the number of cars below 1.6-litre emission standing at 1,240,900, accounting for 64.17 percent of the total and the sale for cars below 1.0-litre emission rose by 93.69 percent year on year to 248,000.

Owing to soaring international oil prices, China saw its refined oil price raised five times this year.

(Xinhua News Agency November 8, 2005)