License plate restrictions may suffer engine failure

0 CommentsPrint E-mail Global Times, January 4, 2011
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In a bid to ease traffic congestion, Beijing recently started a cap-and-lottery issuance system, a policy called by netizens as "the toughest congestion-tackling measure in history."

However, Beijing residents have shown unprecedented passion toward owning their own cars. In December, Beijingers rushed to buy vehicles, clearing stores. The model, the brand or even the price seemed to have lost their importance. Even those who had no plans to buy a car gave into the panic, worried that the cap on new automobile registration would make car purchases much more expensive in the future. Overnight, the restriction order turned into "the strongest promotion policy ever."

For those who failed to board this train, acquiring a car license plate now becomes the first priority. On Saturday, the first day for online applications for license plates, over 50,000 applications were made, more than triple the number to be available each month. As the frenzy unfolds, complaints are being voiced: "What if some just keep their quota and do not make a purchase? There is no punishment against them!"

In China, a purchase-restricting policy always looks embarrassing. The government sees irrational growth in purchases of a certain commodity, like a house or a car, and tries to cool down the market heat by administrative restrictions. The irony is that buyers just become more passionate later.

Some say that there is a strange "China logic" behind all this, namely that restriction policies often end up twisting both market prices and human nature. This seems a plausible explanation. Just a few months ago, a batch of couples faked divorces prior to the arrival of new regulations governing each family's quota of compensation for relocation or to purchase new houses.

However, a much deeper reason points to the scarcity of resources in China. Despite Beijing's severe traffic congestion, its volume of private cars (4.78 million) is still less than that in New York or Tokyo. At the moment, 6.7 million Beijing residents have a driver's license, which means nearly 2 million Beijingers could still potentially buy cars. With more people planning to learn to drive and joining the car purchase wave, the city's planned 240,000 new car registration quota for 2011 will hardly satisfy demand. A lottery is probably the best way to decide who should get the right to register and drive a car. However, it is inevitable that such a limited quota will spark panic buying, only adding to the congestion.

After all, purchase restriction is an expedient. It is practiced to buy time for comprehensive adjustment in urban management. Someday, when the city's public transportation system becomes convenient, avoiding the sardine-like feeling afflicting bus and subway users, perhaps car purchases can return to sanity.

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