Transport Problems and Policy Solutions in China

Abstract

The years since the dawn of the twenty-first century have been an era of rapid growth in the production and consumption of vehicles — primarily passenger cars — in China. Before this time, demand for passenger cars had been driven largely by government and state-owned enterprises, but the vehicle market underwent great changes after China’s entry into the WTO (World Trade Organization) in December 2001. In anticipation of reduced tariffs on imported vehicles, price competition gradually crept into the domestic market; meanwhile, a segment of the consumer population, having accumulated some disposable income during China’s long period of sustained economic growth, began to exhibit surging demand for passenger cars. These favorable trends in both supply and demand have resulted in a significantly enlarged market for passenger cars, primarily sedans, since the year 2002. In 2009, sales of new vehicles exceeded 13.79 million, with passenger cars accounting for 10.33 million, or more than 75 per cent of total sales. By the end of 2009, civilian vehicles in China numbered some 62.88 million.1