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VOL.6 May 2014
Curbing Car Ownership

Recently, a restriction rule on car ownership in Hangzhou, capital city of east China's Zhejiang Province, raised widespread controversy among Chinese citizens.

On March 25, the local government announced a car purchase restriction and implemented it from the next day onwards, making it the sixth Chinese city to clamp down on car ownership. According to the local authority, the regulation aims at easing traffic congestion and combating air pollution.

The government said about 80,000 new license plates will be issued annually since the enforcement of the license restriction. The issuance of new plates will be a combination of Beijing's lottery and Shanghaiís auction methods. Eighty percent of the quota will be decided by the lottery and the remaining 20 percent will be auctioned with a starting price of 10,000 yuan ($1,607).

After the abrupt announcement was made, the public are divided on whether limiting car numbers will be a solution to congestion and air pollution. Supporters believe the regulation is an effective way to guide people to adopt a ìlow carbon and green lifestyleî by taking public transport. However, others argue that it is ineffective, but will deprive people with no cars of the right to buy one and undermine the competitiveness of Chinese home-grown car makers.

Pro

Wang Guangrong

Enorth.com.cn

I think restricting car ownership won't significantly ease the traffic congestion in the short term, but it will reduce some traffic jams, and is also the only way to solve the city transportation problems. As it has been proved in Western countries, too many cars, which are of limited transportation capacity but of high pollutant emission, will inevitably lead to traffic jam. Thus, it is necessary to control the number of cars in cities. The reason for restricting car purchases is to pave the way for the development of public transportation, a fundamental solution to the congestion. Letting the car ownership rise will result in more cars on the road and a sluggish development in the public transportation. Therefore, even if some consumers who are planning to buy cars may criticize the rule as unfair and the restriction will lead to less auto sales, it should be continued as it benefits the majority and long-term sustainable development.

Con

Wang Yahuang

Media commentator

The adoption of license plate lottery or auction is unfair. Middle class and would-be middle class are the groups most affected by the car purchase restriction. Combating air pollution and traffic congestion through limiting numbers of new cars actually sacrifices their interests. If so, first-time buyers of the middle class are paying the bill for previous car holders. In other words, the restriction deprives the middle class of the right to buy cars so as to guarantee a smooth driving for those who already have cars. In my opinion, the government and society wrongly perceived private cars as dispensable luxury and premium consumption goods. Because of this, the government implemented the restriction without any scruples. In fact, as society progresses and cities grow, private cars are becoming a necessity for many Chinese households. And their rights to have this necessity should be protected. To limit car ownership, the government is suggested to make reference from the policy of housing purchase restriction and implement restriction on families who already have cars to have a second car so that the interests of people with rigid demand for cars can be protected. Otherwise, we just need lottery centers, not the government, to allocate the public resources and conduct city management.

Pro

Jiang Guocheng

Dalian Daily

Opponents mainly include car makers and vehicle dealerships that worry the restriction will curb motor vehicle manufacture and consumption. The auto industry is one of the pillars of the economy in China. Thus, the restriction will not only impose profound impact on economic growth, but is also related to tax revenue and employment. From the perspective of pure economic growth, loss because of the restriction outweighs the gain actually. However, economic growth is not the sole goal of local governments. They should also take the responsibility to improve people's livelihood, guide the manufacture and consumption to be sustainable and foster an environmentallyfriendly and energy-saving society. This requires them to take precautions in case of traffic congestion brought by too many cars, especially under the circumstances where road capacity and parking facility are poor in many cities. Facing the dilemma of either boosting economy or guaranteeing smooth traffic, the governments have to choose the latter.

Con

Zhang Zhiyong

Expert on the auto industry

Under the banner of alleviating traffic congestion and combating air pollution, many cities have joined in restricting car purchase. However, are they aware that the restriction will stall their previous efforts on encouraging China's homegrown car makers? Latest statistics released by China Association of Automobile Manufacturers show the market shares of Chinese indigenous automakers, including mainstream ones, declined for a sixth consecutive month in February 2014. The destiny of Chinese home-grown brands is obviously in danger. At this time, the car purchase restriction is no doubt adding insult to injury. Besides, consumers may respond by buying big or premium cars of foreign brands as scarcer plates raise the cost of owning a car and limit chances for future trades-up, leading to even fewer purchases in cars of home-grown brands. The market growing prospect of indigenous car makers is also squeezed by the restriction. With narrow room for growth, the competition will become fiercer, further undermining the efforts of Chinese automakers to grow bigger.

Pro

Luo Shuyi

Media commentator

It is an irrevocable trend to control car ownership. First, fewer cars will effectively ease traffic congestion. Some may argue that the transportation burden can be alleviated through improving traffic network capacity. But actually, it is impossible for a city to expand the network infinitely. The car purchase restriction is comparatively a better solution. Second, fewer cars will improve the air quality. People are showing increasing concern over the air pollution as it is vital to our health. To some extent, the purchase spree for cars during the past years is to blame for the worsening air pollution. Third, controlling car ownership will facilitate a coordinated social development. Although private cars are favored by many Chinese households, the growth of public transportation will ultimately lead to a coordinated city development. And a restriction policy will also boost a sound development in the auto industry as it will force the automakers to upgrade their business.

Con

Dong Yang

Secretary General of China Association of Automobile Manufactures

Restrictions on car purchase has no significant effect on easing traffic congestion and air pollution as is proved in cities which already have the measures in place. According to statistics, exhausts from cars only contributed to less than 10 percent of particles less than 2.5 micrometers in diameter, known as PM 2.5. The key solution is to transform the model of urban development and use the market approach instead of administrative means to tackle the problem. Besides, reform on taxation in the auto industry should be deepened.

 

 

 

 

 

 

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