Deng Li, deputy director of the Market System Development Department, said 7.94 million used vehicles were sold in the country last year, accounting for about 40 percent of total automobile sales.
Deng said in a mature market, used car sales are as much as 300 percent greater than the number of new cars sold.
China's official Xinhua news agency reported Saturday China is making efforts to encourage auto dealerships to expand their used car business.
Used cars will sell better if companies offer better warranties, Xinhua reported.
Deng said China would lower the sales tax and create an online marketplace for used cars.