China Power

China in a Jam

Is a 60-mile traffic jam leading into Beijing a sign of things to come for Chinese car owners?

Those reading this entry today who think they had a bad commute to work should spare a thought for drivers trying to get into Beijing. Yesterday, a 60-mile traffic jam on the Beijing-Tibet expressway entered its ninth day, with some estimating the delays could stretch into the middle of next month as road crews repair the damage caused by the large number of trucks that use the route.

The official Xinhua News Agency reports that such delays are nothing new, noting that only last month traffic on the expressway was forced to a crawl for nearly a month. Drivers have apparently been idling their time away playing chess and cards—and complaining about price gouging among the noodle sellers that have sprung up hoping to take advantage of the captive market.

Car ownership has been growing rapidly in China, jumping from nearly 50 million owners in 2008 to 63 million by the end of 2009. And, having recently apparently passed Japan as the world’s second largest economy, the country is also poised to pass it sometime next year to become the second-largest car market, according to China’s State Information Centre.

The implications for the local environment (air and noise pollution) and in terms of congestion and greenhouse gas emissions are clearly enormous and the Chinese government was concerned enough in May to hold a special cabinet session to discuss the country’s surging energy demand after it posted what the new York Times described as ‘the largest six-month increase in the tonnage of human generated greenhouse gases ever by a single country.’

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Rising car ownership is of course only one aspect of this increase. But an interesting paper from a few years back by IMF and University of Virginia academics has some interesting insights into what works and what doesn’t in terms of possible government intervention aimed at tackling pollution and congestion.

According to the paper on mass car ownership in emerging markets, penned by Marcos Chamon, Paolo Mauro, and Yohei Okawa: ‘(A)n increase in fuel taxes would seem a promising avenue to stem the increase in greenhouse gases, stringent standards on the quality of fuel and tailpipe emissions would help reduce local pollution, and time-varying “cordon” tolls made possible by recent technological improvements have the potential to reduce congestion in some of the main cities.’

However, the paper also notes that although such policies are better than doing nothing, and can certainly play some role in mitigating some of the damage, ‘they are unlikely to be able to avoid a massive increase in the undesirable by-products of car ownership and use.’ Instead it suggests that ultimately the key will be progress in areas such as plug-in hybrids.

There may be a little (short-term) good news for those hoping for a slowdown in car-buying. According to global metal markets analysts at MetalMiner, ‘the steam is escaping from China’s superheated car market’.

According to the site, withdrawal of government incentives to buyers and a tightening of bank lending have had a significant impact on sales. ‘Chinese car makers sold 13.6 million cars in 2009 and were expected to hit 15 million this year the China Car Times recently reported, but that now seems highly unlikely as most volume car makers are way behind target,’ it notes.

Still, in the long-term there’s likely to be little relief, as it goes on to mention the potential for growth—car ownership outside the cities is currently about 5 percent, compared with 75 percent or more in the United States.

This all raises the recurring question of whether the world can support a growing China that consumes like Americans. Of course, as Jon Watts noted in an interview with The Diplomat recently on his new book ‘When a Billion Chinese Jump’, the answer is no. But the problem is it can’t support that kind of growth even if it was based on the more efficient consumption of Japan.

Resolving the question of how best to encourage people to scale down their consumption is a difficult enough question to address for US policymakers whose political survival frequently rests on being able to dangle the prospect of future mores for constituents. But it’s perhaps harder for a government whose continued existence is so dependent on a tacit bargain of relentless growth in exchange for democratic ‘compromises’.