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China Military to Stop Buying Foreign-Branded Cars, Xinhua Says

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Jan. 13 (Bloomberg) -- China’s military will stop buying foreign-branded vehicles as part of a campaign to promote frugality and reduce waste, the Xinhua News Agency reported.

The measures were approved by President Xi Jinping and the central military commission, Xinhua said, citing the People’s Liberation Army headquarters.

The military will also limit official trips and lavish receptions and ban its members from receiving gifts and souvenirs, Xinhua said. The armed forces will strictly control new construction of official buildings or the renting out of office space, according to the report.

China is pressuring bureaucrats and the military to buy locally branded cars to cut lavish spending of taxpayers’ money. The military said last year it would ban the use of military number plates on luxury cars, including Porsche and Bentley, in a crackdown on abuse as part of Xi’s campaign against corruption.

In a full-page special report last April in the PLA Daily, the official newspaper of the armed forces, the PLA logistics department gave a list of luxury autos that will no longer be allowed to use military plates. Banned cars include Mercedes-Benz, BMW, Lincoln, Cadillac, Volkswagen Phaeton, Bentley, Jaguar, Porsche and all-terrain vehicles include Land Rover, Porsche Cayenne and Audi Q7.

Chinese automakers from China FAW Group Corp. to SAIC Motor Corp. have stepped up development of premium models in anticipation the government will lend more support to help them revamp an image as producers of cheap, utilitarian cars.

To contact Bloomberg News staff for this story: Chua Kong Ho in Shanghai at kchua6@bloomberg.net

To contact the editors responsible for this story: Chua Kong Ho at kchua6@bloomberg.net; Young-Sam Cho at ycho2@bloomberg.net

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