The Ministry of Industry and Information Technology also addressed public concerns on whether the car industry is overheated. Figures show China's automobile output reached 10 million vehicles and could hit 13 million by the end of the year. Production is 40-percent higher than the same period last year. But despite the figures, the Ministry says there's no overheating yet.

The official with the Ministry of Industry and Information Technology explains that with a large population, China's total auto output is really not very high.

Zhang Xiangmu, Ministry of Industry and Information Tech. said "In terms of total vehicles produced and sold, China's figure is not too high compared to the United States, Europe and Japan."

He adds that this year's growth in sales can be attributed to a drop in the tax on buying low emission vehicles. The government's measure to promote auto sale in rural areas also plays an important role.

In addition, the official noted that no decision has been made on whether tax reduction on low emission cars will be extended. The preferential policy will be due on December 31st this year.

Zhang Xiangmu said "On the implementation of industry adjustment and reinforcement measures, we will make an evaluation at the last stage. We will also seek opinions from industry association and companies."

At the beginning of this year, China launched policies that cut tax on passenger cars below 1.6 liter by half to five percent.

Some analysts say the policy drives up production and sales, ultimately boosting the amount of tax collected. But it also furthered the development of the industry and created more jobs. The analysts believe that the policy should be extended.