Beijing's New Year resolution: scrap polluting cars

BEIJING (Reuters) - Beijing, beset by choking traffic and heavy air pollution, will take more than 350,000 high-polluting vehicles off inner city streets from Thursday, local media reported.

China's capital has banned cars from the roads on one out of five weekdays based on the number of license plates as part of a six-month trial in the wake of broader restrictions during the Olympic Games in August that cleared skies and eased congestion.

Drivers of high-emissions vehicles, known as "yellow-label" cars, would be fined 100 yuan ($15) if found to be driving within the city's Fifth Ring Road, a highway on Beijing's outskirts, after a three-month grace period, the Beijing News said.

The measure stands to take about 10 percent of the city's cars off the road. Beijing currently has about 3.5 million registered cars.

The government had also drafted a compensation scheme that will give drivers up to 25,000 yuan ($3,600) if they proactively give up their cars during 2009, the paper said.

The city would also provide preferential loans to shipping and transport companies to upgrade their vehicle fleets to meet low-emission standards, the paper said, citing the city's traffic bureau.

Beijing authorities have credited cleaner skies above the capital in recent months in part due to the traffic restrictions, as well as decreased emissions from shuttered factories in the city's outskirts.

Car ownership along with rising incomes has skyrocketed in Chinese cities in recent years, posing head-aches for town planners already struggling to build roads and public transport to meet burgeoning urban populations.

(Reporting by Beijing newsroom; Editing by Ian Ransom)