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China Strips Junior Officials of Car Perks

July 16 (Bloomberg) -- China will stop providing cars to junior officials and reduce the size of its government fleet as part of measures to cut public spending.

Communist Party cadres and government officials ranked below vice minister will be given monthly allowances of 500 yuan ($80) to 1,300 yuan in lieu of government vehicles, the official Xinhua News Agency reported, citing the Party and State Council. The reforms will be completed in two to three years, it said.

The measures build on President Xi Jinping’s campaign against lavish spending for government officials, who’ve long been used to riding in Audis. The announcement also follows directives for the government to bolster its purchase of electric cars and local branded vehicles.

While the total number of affected vehicles wasn’t disclosed, state broadcaster China Central Television said on its Weibo microblogging account that existing government cars will be auctioned off to the public, with the first batch of 5,000 going on sale before the end of this year.

Such disposals would further diminish China’s biggest car fleet. Central government agencies cut their fleet by 37 percent last year, according to the Central Commission for Discipline Inspection and Ministry of Supervision.

Last year, the city of Yanan raised 5.7 million yuan from auctioning used Audis driven by city officials. The military has also stepped up scrutiny of the use of official vehicles in an audit last year, Xinhua reported in September.

Overseas brands have accounted for about 80 percent of the official pool, with Volkswagen AG’s Audi making up about one-third of government and state-linked enterprise fleets, according to Guotai Junan Securities Co. estimates.

The government will retain official cars for emergencies, special purposes and front-line law enforcement, according to Xinhua.

To contact Bloomberg News staff for this story: Alexandra Ho in Shanghai at aho113@bloomberg.net

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

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