At the beginning of 2009, the Chinese Government put several policies into place to encourage the development of its automobile industry. China allowed buyers to pay only 7.5-percent tax for purchases of cars with small engine displacements (less than 1.6 liters) in 2010,allows people to exchange their old, used vehicles for new ones, and subsidies to rural buyers.

According to Rao Da, Secretary-General of the China Passenger Car Association, passenger vehicle sales for the first 10 months of 2010 totaled 14.67 million, a rise of 35 percent from last year. It's predicted that the final numbers for 2010 will total 18 million, which will surpass a record high previously set by the auto market in the United States.

Farmers buying automobiles have been benefited from the policy. "The 'old cars for new cars' policy has also encouraged sales while protecting the environment," said Rao. "A major difference between China and foreign countries is that China's automobile market is policy-oriented; increases in automobile sales have largely come from the stimulation created by our national policies, and the sudden end of the policy may bring about huge burden for both enterprises and the market."