Nov. 27 (Bloomberg) -- China, the world’s second-biggest oil user, plans to have 60,000 alternative-energy vehicles on the roads in 10 cities by 2012 to cut pollution and fuel imports.

The government will support automakers’ research in the area through financial assistance and preferential policies, Science Minister Wan Gang said in Chongqing today. It may also give subsidies and tax breaks to organizations and people buying the vehicles, said Wang Baoan, a Finance Ministry official.

“Running alternative-fuel vehicles in government-funded projects is the most efficient way of promoting the development of the technology,” Wan said. The government is seeking other cities in which to implement similar programs, he said.

China has encouraged local automakers to invest in developing hybrid cars and fuel cells to help reduce emissions, and because of rising global demand for fuel-efficient cars. Global vehicle ownership is likely to rise 22 percent to about 1 billion by 2020, according to General Motors Corp.

“Companies that can withstand the current difficulties and come up with new technologies will be able to claim a leading position in the industry,” Wan said.

Wan spoke at a ceremony to mark Chongqing city’s purchase of 10 hybrid cars made by Changan Automotive (Group) Ltd. The western Chinese city will also provide 20 million yuan ($2.9 million) to Changan Auto to help fund research into alternative energies, said Xu Liuping, the carmaker’s chief executive officer.

The central government may subsidize public agencies that use alternative-energy vehicles because of the higher purchase costs, said Wang. The funding may be extended to consumers later, he added. Tax breaks are under consideration as well, he said.

Automobiles account for about half of the total oil consumption in China, the world’s largest vehicle market behind the U.S. That may rise to 60 percent by 2020, according to the Development Research Center of the State Council.

To contact the reporters on this story: Tian Ying in Beijing on ytian@bloomberg.net

Last Updated: November 27, 2008 04:53 EST