The Chinese auto industry reached a major milestone in 2009. After a decade of continuous growth, China became the largest car market in the world. In 2012, it also became the world’s largest producer of emissions, in part from the rapid spread of personal cars and gasoline-powered trucks and buses. The Chinese government understood that it had an environmental problem.

China’s twelfth Five-Year Plan (2011–2015)—its core economic and social development roadmap—identified seven strategic...


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