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It will be in China’s best interest to offer support for smaller cars

¡°I am a small-displacement car and I want freedom!¡± This was a poster on top of a minicar made by Chang¡¯an Automobile displayed at a recent auto show in China.


As China¡¯s biggest minicar manufacturer, Chang¡¯an has been lobbying the central government to remove restrictions on small-displacement, economy automobiles. The most recent effort of such lobbying came directly from chairman Yin Jiaxu in the form of a 10,000-word letter addressed to the State Council, China¡¯s cabinet (see p.11).  


Restrictions on the operation of small cars and minivans on certain roads are seen in a growing number of cities in China. According to incomplete statistics, 84 cities across the country have discriminative regulations with regard to the operation of small-displacement cars and minivans. Municipal governments cite all kinds of reasons, ranging from city image, slow speed, safety, traffic congestions, etc., etc., in support of local restriction on the use of such vehicles.


In Beijing, for example, cars with engines of 1.0L and less are banned on Chang’an Avenue, the main east-west boulevard running in front of Tian¡¯anmen Square. Minivans are not allowed to drive on the 2nd and 3rd Ring Roads during daytime hours.


In Shanghai, China‘s financial hub, vehicles with engines smaller than 1.2L are forbidden on elevated roads. Guangzhou, the largest city in South China, stopped granting license plates to cars under 1.0L since August 2001.


Yin¡¯s ¡°Suggestion to Abolish All Discriminative Policies Against Small-Displacement Automobiles at an Early Date for the Sake of State Strategic Security¡± received strong support from economy vehicle manufacturers, whether state-owned, foreign-invested or privately owned. 


Recent events show that China is taking measures to support the development of small automobiles. The central government realizes that issuing administrative orders to stop the discrimination of small cars could hardly work. The adoption of concrete and enforceable measures in support of smaller vehicles is more important. The release of the Regulation on Fuel Consumption Limits for Automobiles is one example. And a new consumption tax scheme to be published soon in favor of small-displacement vehicles is another.


For a developing country such as China, both energy conservation and environmental protection concerns dictate that the country should not follow the model of the U.S. in popularizing large-displacement automobiles and gas-guzzling SUVs.


Although average wage level in China is only a fraction of that in the U.S., gasoline prices are cheaper. China¡¯s absence of a fuel tax has effectively helped drive up demand for larger vehicles. Both the industry and the government now agree that the country cannot afford to postpone the institution of a fuel tax any time longer.

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