China's cabinet agreed to re-introduce financial incentives that encourage consumers to trade in passenger cars to help stoke the demand for those vehicles, a government official said.

The State Council approved the plan last week and various ministries are working on various details related to it, seeking to specify what sorts of vehicles it will apply to and the amount of State money that will be involved, according to the official, who asked to not be identified.

The government is also conducting feasibility studies on the possibility of helping to pay for purchases of new cars in rural areas, the official said.