Starting this year, China has begun to reduce its subsidies for new energy vehicles--a move that a number of industry insiders believe will positively impact the sales of such vehicles.

Many insiders argue that the reduction of subsidies does not mean the weakening of supportive policies for the industry. According to Song Qiuling, an official with the Ministry of Finance, the upcoming changes to subsidy policies will help to raise the technical threshold and establish a sound oversight system for the industry, which will in turn boost technical advancements and encourage innovation.

Chen Qingtai, president of the China EV100 Forum, said that as the subsidies gradually decrease, the government will put more effort into research and development, concentrating resources on breaking bottlenecks in key areas.

According to the Ministry of Finance, the government will cut 2017-2018 subsidies by 20 percent from those granted in 2016, and 2019-2020 subsidies will be 40 percent less than those provided this year.

"Cutting the amounts of subsidies will generate strong positive energy. Subsidy-oriented production will give way to market and innovation-oriented production. Companies with innovative capabilities and core technologies will succeed in the end,” Chen said confidently.