China has a well-known problem with the air quality in its largest cities. The issue was highly publicized just prior to last year's Olympic Games in Beijing, and since then, the government has taken various steps to rectify the problem, including banning vehicles on alternating days according to their license numbers and promoting the sale of smaller, more efficient vehicles through tax breaks.
To continue bolstering its efforts at reducing oil usage and cleaning up the air, China will soon be offering subsidies on new hybrid vehicle purchases. As it currently stands, hybrids have not made a big dent in overall vehicle sales in China due to their high cost. Soon, though, companies like BYD, SAIC and Chery will offer less expensive options to Chinese buyers.
There are some fuel efficiency guidelines incorporated into the legislation - In the main, in order to qualify, hybrid vehicles must be at least 5% more fuel efficient than their non-hybrid counterparts. Fuel efficient buses will also qualify for subsidies when purchased by governmental departments as long as they are at least 10% more efficient than the vehicles they will replace.
[Source: China Car Times]