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China's green car scandal goes up a gear

Friday, September 09, 2016 - 01:45

China's green car subsidy scandal spreads to more than 20 carmakers named and shamed by China's Ministry of Finance, as Hayley Platt reports.

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Air quality in China is amongst the worst in the world. It's something the government is trying to tackle by offering subsidies to car manufacturers to go green. But on Thursday China's Ministry of Finance punished at least five car makers - accusing them of cheating the system which pays out over $4.5 billion annually. The scandal has now widened to more than 20 firms. And although China wants to wean consumers away from fossil-fuel-powered vehicles, not at the cost of the economy. (SOUNDBITE) (English) PANMURE GORDON CHIEF ECONOMIST, SIMON FRENCH, SAYING: "Their consumer base very much want to consume western cars but the desire to move tastes towards domestically-generated product lines is quite strong because clearly there are social and economic spillovers which the Chinese want to exploit." But it's not just international firms like Japan's Nissan and South Korea's Hyundai said to have committed violations. Chery Holdings - owner of the seventh most popular Chinese passenger brand can expect a fine. And Suzhou Gemsea Coach Manufacturing is to have its production license revoked. (SOUNDBITE) (English) PANMURE GORDON CHIEF ECONOMIST, SIMON FRENCH, SAYING: "I think it speaks to the fact that across the world we have a more protectionist set of governments who are looking to challenge free trade and move towards a protectionist stance where they're own production is favoured over international production." China has a target to sell 700,000 electric and plug-in hybrid cars a year. Up until August it had sold less than half that. And this latest scandal is likely to do little to improve sales.

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China's green car scandal goes up a gear

Friday, September 09, 2016 - 01:45