Groups of experts are sent into factories, especially state enterprises, for consultation to improve management and encourage innovation. It also assists local economies by consulting on local projects in cities. There is also international cooperation: the CAE has memoranda of understanding with nine sister engineering academies, including the NAE.

Recently the CAE sponsored an International Conference on Engineering and Engineering Sciences. Dr. William Wulf, president of the NAE, gave a keynote speech, and Jiang Zemin, President of the People’s Republic of China, spoke on the importance of engineering science to development.

Professor Dale Compton, home secretary of the NAE and co-chair of the Committee on the Future of Personal Use Vehicles in China, next described the nature of the CAE initiative and joint study to explore opportunities and issues. The focus will be on personal transport technology, the societal implications of rapid motorization, and the effect on infrastructure, land use, and the environment. The committee will explore the experiences of other countries with regard to new technologies, their socioeconomic impact, emissions, petroleum dependence, and use of alternative fuels. He said the NRC does not claim to have the answers, but can help to identify and understand the options facing China and try to avoid some of the problems that the United States has experienced.

Professor Guo Konghui, Jilin University of Technology and CAE co-chairman of the Committee spoke next on “Issues We are Facing.” The number of personal use vehicles* (PUVs) in China has been growing by 20 percent per year since 1985. In 1999 the number was 14.52 million, or about one PUV per 90 persons. Of those vehicles that are personal use cars (PUCs) there is about one car per 350 persons. (In the United States the number is nearly one per person.) The car market was 0.56 million sales in 1999; if the Chinese demand were equal to the world average for its population, the market would be 10 million sales per year. It is forecast that China will attain this level in 15 to 20 years, and at that time it will cause a serious impact—not only on China but on the world as well.

What forces are restricting the Chinese market? Guo listed seven.

  1. Government policy. There is a high tax on cars, at 20 different levels. For example, for a business vehicle like a taxi, the total tax is more than 100 percent of the price, and for non-business vehicles the total tax is up to 50 percent of the price. Other payments or “donations” must be made under different names. This is a serious burden for car owners.

  2. Low personal incomes. In 1999, the average personal income for urban dwellers was 58,590 yuan (about $7,000), rising from 51,550 yuan in 1998. In rural areas, the average income was 2,205 yuan in 1999 and 2,116 yuan in 1998. The average personal income increase between 1998 and 1999 was 9.3 percent in cities, 4 percent in the countryside. Even so, there are many families that are able to buy a car but are discouraged by the high taxes and complex procedures associated with its purchase.

  3. Environmental issues. Air pollution is a serious issue in the cities, and this exerts a social pressure on the government to restrict new car sales.


Personal use vehicles (PUV’s) are defined as motor vehicles that are owned by individuals rather than government or private organizations. The number includes cars, buses, taxis, trucks, and tractors. The number of vehicles that are used by individuals for their personal business is probably higher, since many company and government vehicles are used as PUVs at least part of the time.

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