(Yicai Global) June 5 -- Authorities in Guangzhou, capital of China's southern Guangdong province, have released draft guidelines for driverless vehicle testing on its roads, a key step in moving forward with the development of the sector.

Guangzhou's local government will allow testing companies to test driverless vehicles with passengers in order to explore the technology's use in unmanned ride-hailing services, China News Service reported.

Beijing was the second Chinese city to grant licenses for road tests of smart connected vehicles, issuing its maiden permit on March 23 this year after Shanghai beat it to the punch on March 1. Fuzhou, Chongqing and Shenzhen are among other cities offering autonomous vehicle licenses.

China is expected to be the biggest market for driverless cars globally, driven by the population's positive attitudes toward new technologies, a recent McKinsey report found. The country will have about 8 million autonomous cars by 2030 and over 13 million by 2040, while sales of self-driving vehicles will increase substantially from USD230 billion in 2030 to USD360 billion in 2040.

The rules will also allow testing to take place in a platoon formation to facilitate driverless freight vehicles.

Guangzhou aims to attract foreign as well as domestic companies to set up shop in the city, the draft states. The local government will also offer fast-track approvals processes for firms that have already tested driverless vehicles on roads in other countries and regions or other cities in China and if they have reached a certain technological level.

As part of safety measures, the guidelines require testing companies to buy necessary commercial insurance for every vehicle included in trials, while ensuring that testing drivers are capable of performing their responsibilities well.

Editor: William Clegg