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China gives thumbs up to hybrids with new green-car category

Toyota and Honda to benefit from policy shift

A Toyota Levin plug-in hybrid vehicle is displayed at the Auto China motor show in Beijing.   © Reuters

BEIJING -- The Chinese government said on Monday it would create a new category under fossil-fuel-powered cars, that is expected to include hybrid vehicles, from January in a widely anticipated move to relax controls on automakers and to encourage production.

Beijing had been set to shift its automotive strategy to rely more on hybrid vehicles as part of its efforts to clean up the environment, instead of focusing solely on electric vehicles, a development likely to work in favor of Japanese automakers such as Toyota Motor and Honda Motor.

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