A woman walks past a huge billboard advertising a car model in Shanghai.
A woman walks past a huge billboard advertising a car model in Shanghai. - 
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STEVE CHOITAKIS: China is a country gripped by air pollution. Factories are all over the place. And now more than ever, cars are everywhere. Today the Chinese government announced it'll create new standards to encourage the widespread use of electric cars. That news comes on top of plans to spend $15 billion to develop electric and hybrid vehicles.

Marketplace's Shanghai bureau chief Rob Schmitz reports.

ROB SCHMITZ: Some think the U.S. is falling behind China in the development of green-energy technologies. But China worries about keeping pace, too.

Shanghai is so full of electric-powered motorbikes that it makes crossing the street a death-defying act. But automobile industry analyst Zeng Zhi Ling says in terms of electric cars, China thinks the U.S. and Japan are leading the way.

ZENG ZHI LING: And that's why the government tries to encourage Chinese companies to take this opportunity to close the gap with the international players.

China hopes to put more than a million electric and hybrid vehicles on its roads within a few years. Part of this subsidy will pay for research and development among an alliance of 16 state-owned enterprises.


Industry consultant Zhang Zhi Yong says this is a good investment for a country that just surpassed the U.S. to become the largest automobile market in the world. And this $15 billion investment now makes China a world leader in government-funded R&D for electric vehicles -- a message to the U.S. that a state-controlled economy has its advantages.

In Shanghai, I'm Rob Schmitz for Marketplace.

Follow Rob Schmitz at @rob_schmitz