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New anti-pollution measures to affect automobile sales

BEIJING – China’s State Council announced on June 14 to adopt 10 specific measures to control the country’s worsening problem of air pollution.

The measures have been drafted under the direction of Premier Li Keqiang, who presided over a State Council meeting addressing the exacerbating issue of air pollution.

“Curbing air pollution is a major task because it involves people’s livelihood and the upgrade of China’s mode of economic development,” reads the State Council notice. “The country’s increasing regional and complex air pollution has been accumulated through many years in the past,” the notice said. “Tough measures must be undertaken to address tough problems.”

The 10 measures include reducing small coal furnaces and urban dust, eliminating one year ahead of schedule old production facilities in steel, cement, aluminum and plate glass manufacturing, reducing pollutants by major industries by at least 30 percent by the end of 2017, increasing supply of clean energy such as natural gas and coal-based methane, instituting new mechanisms of reward and punishment in energy saving and pollution reduction, revising the existing Anti-Air Pollution Law and raising industry emission standards, building regional anti-pollution alliances such as Beijing-Tianjin-Hebei, Yangtze Delta, Zhujiang Delta, etc. to reduce PM2.5 in major metropolitans, instituting emergency actions to control the production and emissions of heavy-polluting enterprises and restrict motor vehicle use, and designating local governments to be responsible for local air quality.

Severe air, soil and water pollution has become a major concern of the general public in China, affecting the basic life of millions of Chinese citizens in the cities and the countryside.

As admitted by the State Council notice, it will be a long-term and tough challenge to resolve China’s air pollution problems even if the new measures are strictly implemented. The serious air pollution such as seen earlier this year in Beijing and the entire northeast China has been the result of almost 30 years of industrial development and urbanization drive.

Almost all of the 10 measures announced are directly or indirectly related to the future of China’s automobile market. The rapid increase of automobile parc in almost all medium and large cities in China plus worsening traffic congestions have contributed to urban air pollution, especially PM2.5 particles.

Earlier this year PM2.5 hit 700 micrograms per cubic meter in Beijing, making it unsafe for citizens to even walk in the open air. The safe level of PM2.5 recommended by the World Health Organization is 25 micrograms per cubic meter.

A Deutsche Bank report on air pollution in China released earlier this month called for significant policy changes to reduce the urban PM2.5 to a level of 30 by 2030, according to an AP story. The AP story quoted Deutsche Bank as saying that China should sharply reduce the growth in coal consumption and new cars and massively increase investment in cleaner energies – gas, nuclear, hydroelectric, wind and solar, and in subways and railways.

Analysts believe that the implementation of the 10 measures will have an immediate impact on automobile sales in China. With the 10 measures, China’s Cabinet has effectively authorized local governments to determine if they need to restrict both registrations and the use of automobiles in order to alleviate air pollution plus traffic congestion. Recently a number of cities such as Tianjin, Xi’an, Chengdu, Hangzhou, Shenzhen, Zhengzhou and Suzhou have started looking into the necessity of limiting the number of car registrations. A growing number of cities are also considering the option, such as the practice in Beijing, to limit the use of vehicles by one day a week.

The 10 measures will help boost, however, China’s development of new energy vehicles.

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