The Future of Personal Transport in China: Summary of a Symposium, January 12, 2001 (2001)

In August 1999 a delegation from the Chinese Academy of Engineering (CAE) led by Professor Guo Konghui visited The National Academies in Washington to discuss opportunities for collaboration on a study of the future of personal use vehicles in China. Barely motorized at present, China is confronted with the prospect of a massive increase in demand for automobiles. The question of how to address that demand involves consideration of existing infrastructure, including roads, parking areas, alternative public and personal modes of transport; availability of high quality fuel, and ability to control the pollution and congestion of Chinese cities. The CAE has been asked to provide advice to the Chinese government on this issue, and the delegation invited the National Academy of Engineering (NAE) and the National Research Council (NRC) to collaborate on a study with them.

The study will be carried out by a Committee on the Future of Personal Use Vehicles in China. The members were nominated by both the NRC and the CAE, and the membership has been approved by both organizations. The committee had its first meeting during January 11–13, 2001, at the National Academy of Sciences (NAS) in Washington, D.C. On Friday, January 12, the committee invited a group of experts to join some members of the committee to review the issues surrounding rapid motorization in China and the world experience in confronting similar problems in other countries. This symposium was designed to serve as the initial technical presentation to the committee and enabled some of the more difficult issues to be introduced by non-member experts in a setting outside of the committee room where they would be debated. This summary was prepared by Michael Greene, staff director of the committee, as an attempt to capture the presentations and the subsequent discussion. The author takes responsibility for all errors and omissions.

Dr. C.William Colglazier, executive officer of the NRC, opened the symposium. He described the functions and activities of the National Academy of Sciences (NAS), chartered by Congress during the Lincoln Administration in 1863, and its two sister organizations, the NAE and the Institute of Medicine (IOM), and the NRC (the operating arm of The National Academies). The NRC conducts about 250 studies a year, mostly at the request of the United States Government. Dr. Colglazier gave some examples of recent studies and distributed the Report to the Congress and other materials.

Dr. Zhu Gaofeng, vice president of the CAE, described his organization. The CAE was founded in 1994 as the highest advisory institution in engineering. It now has 542 members. Its mission is to promote the progress of engineering to facilitate economic development in China. Since its establishment, it has carried out 50 activities related to national goals in engineering and 16 projects for state commissions and ministries. Among them have been a strategy for water resource development, a paper on subway system construction, and a proposal for reform of engineering education. These policy papers have played an important role in government decision making. In the case of the water report, the government sent copies to all provincial governments as a basis for policy making. The CAE was invited for direct discussions with the Development Commission during the preparation of the Tenth Five-Year Plan for China.

The CAE is also active in industrial development through an initiative on industrial relations.

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.

4. Energy sources. China’s oil imports are growing rapidly, comprising 50 million tons in 2000. At the same time, the quality of the fuel is not satisfactory for low emissions or advanced technology vehicles. The gasoline contains a high proportion of olefins, and the diesel fuel is high in sulfur. Increasing dependence on imports is considered a national security issue.

5. Infrastructure problems. China has low road capacity, and average speeds in cities are below 20km/hr.

6. Controversy over PUC development. Some believe the government must constrain the expansion of PUCs, while others consider expanded motorization inevitable. (A similar debate involved expanding the use of air conditioning 10 years ago when energy was in short supply. Despite initial constraints, air conditioning is now widely used in China.)

7. The auto industry as a “pillar” industry. Some see development of an auto industry as an engine of growth for China, while others believe there is no need to develop a Chinese capability in automobiles in an era of globalization.

Professor Guo then described what the CAE hopes for from the study.

• Achieve a proper understanding of the implications of the development of PUVs in China.

• Profit from world experience in solving the problems of congestion, pollution, energy consumption, technology choice, urban planning, and traffic management.

• Clarify the social and material costs and benefits of development of a new vehicle that would be affordable to large numbers of middle class Chinese families. (To emphasize the prospect of involving advanced technologies, China has developed an initiative called the Chinese New Generation Vehicle [CNGV].) Explore opportunities for international cooperation in developing the CNGV.

• Advise the Chinese government on removing barriers to reasonable development of a personal use transport system and the automotive industry, and on encouraging cooperation between government and industry for promotion of the CNGV and related technologies.

The CAE has already taken some steps to promote the study. They have visited several enterprises to exchange views and gather financial support for the joint study. They have organized some workshops on market and the economy, energy, environment, transport problems, and technological choice. The outcome of the workshops is a consensus that the government should facilitate the development of PUVs, and specifically the CNGV, by including the issue in the Tenth Five-Year Plan. China also should develop its own automotive industry in cooperation with the world industry, utilizing technologies from other countries. The results of the workshops were transmitted to decision-makers via various media channels.

Recently, the automotive industry has been selected by the Chinese government as one of seven key traditional industries for reform. A policy to encourage PUVs has been announced. Progress and innovation in science and technology, especially in information technology, advanced materials, and other technologies applicable to automobiles, will be supported. Investment in highway construction and oil and gas pipelines will be emphasized.

Professor Guo expressed the hope that cooperation with the NRC will lead to reasonable development of a CNGV and sustainable development for China in the 21^st century.