Personal Cars and China (2003) / Chapter Skim
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2. Motorization from a Global Perspective
2. Motorization from a Global Perspective
Pages 14-36
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From page 14... ...
GLOBAL COMPARISONS OF NATIONAL MOTORIZATION Since the 1960s many studies have examined what determines the number of motor vehicles used in countries and cities over time. All studies find that income is a major determinant of the size of the motor vehicle fleet across countries and cities in developing and industrial countries.
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From page 15... ...
The growth of national motor vehicle fleets parallels that of income: a 1 percent increase in income is associated with a 1 percent increase in motor vehicles, and this relationship has been relatively stable for the past 30 years. The relation between motorization and income between 1970 and 1996 is summarized in Figure 2-1, which shows data for a sample of 50 countries, with seven countries identified.2 Both per capita income and motorization levels vary over a nearly thousand-fold range, as shown by the logarithmic scales used.
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From page 16... ...
However, a look at two countries with similar income levels reveals that Thailand's motorization level is above Brazil's, yet Brazil has a much larger motor industry than Thailand (see Figure 2-1~. Vehicle and fuel prices are two policy instruments that often affect motor vehicle ownership and use.
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From page 17... ...
FIGURE 2-2 Automobile share of motor vehicle fleet in relation to income, selected countries, 1970 and 1996. NOTE: Per capita gross domestic product (GDP)
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From page 18... ...
China's motor vehicle population, its paved road length, and its number of motor vehicles per kilometer of paved road (8.3 in 1996) are close to the average for its income level.
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For example, Shanghai's road length of 0.43 m per person in 1997 was similar to that of Bangkok, Jakarta, and Manila. Because the number of motor vehicles has been increasing faster than the length of paved roads in large Chinese cities, the number of vehicles per kilometer of paved road has been rising.
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The central government recently restricted local government powers, abolishing many local fees on vehicle registration and use (China Online News, 2000b) and supporting the elimination of bridge tolls in Shanghai.
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Where vehicle insurance is required and vehicle operators are held liable for damage they cause, vehicle owners pay much of the cost of accidents through insurance premiums. In China, accident and motor vehicle-related fatality rates are high, although they are consistent with China's per capita income (Figure 2-4~.4 In 1996 the annual motor vehicle fatality rate per million vehicles was about 6,000 in China, which was about 30 times higher than the U.S.
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From page 22... ...
Fuels are regulated for example, leaded gasoline has been banned and new emissions standards promulgated by the State Environmental Protection Administration require light-duty vehicles in China to meet European Emission Standard II (Euro II) by the year 2004 (China Online News, 2001a)
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7 Projections of motor vehicle fleet size are made using total income and not income per capita, because empirical estimates indicate that population is a scale variable (has an exponent of 1.00) in regressions of total fleet size on per capita income and population.
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.9 CHANGES IN INTERNATIONAL TRADE POLICIES In 1999 China was the seventh largest national economy as measured by GDP valued at market exchange rates and the second largest (behind the United States) when GDP is measured using purchasing power parity 9 These standards call for retiring vehicles that have reached 30,000-50,000 km or eight to ten years of age.
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From page 25... ...
China was accepted into the World Trade Organization in late 2001; it was not a member of the WTO's predecessor, the General Agreement on Tariffs and Trade (GATT) .~° China steadily liberalized its trade policies during the 1990s, but joining the WTO will involve many additional changes and obligations (see Box 2-1~.
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From page 26... ...
China's automotive industry is relatively fragmented; as of 1999 it had 118 original equipment manufacturers of motor vehicles. Its overall production capacity for cars was 910,000 at the end of 1999, and annual production was 605,000.
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From page 27... ...
The Effects of WTO Accession on China's Automotive Industry A few scholars have attempted to develop quantitative estimates of the economic effects of China's accession to the WTO (Development Research Centre, 1998; Fan and Zheng, 2000; Zhai and Li, 2000; Wang 2001~. One recent paper developed estimates for 22 separate industries, including the automotive industry, using a computable general equilibrium model that includes China and other countries or regions of the world (Ianchovichina and Martin, 2001~.
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From page 28... ...
Urban residents have higher-than-average incomes and therefore buy automobiles earlier and at a higher rate than the general population. Because urban vehicle fleets grow more rapidly than urban road length, urban congestion increases quickly promoting the decentralization of population and employment from central to peripheral locations.
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Although subject to considerable quantitative uncertainty, these analyses signal that China's automotive industry may face a significant structural adjustment from WTO accession.
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From page 30... ...
30 APPENDIX 1 NATIONAL DATA National Data, 50 Countries, 1970 and 1996 PERSONAL CARS AND CHINA 1970 GDP 1996 GDP 1970 1996 per capita per capita Land area Land Art Country (1995 US$)
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From page 31... ...
MOTORIZATION FROM A GLOBAL PERSPECTIVE 31 1996 1996 Motor area Land Area 1970 Total 1996 Total Vehicle-Related (km2) Population Population Deaths 2,381,740 13,700,000 28,600,000 2,736,690 24,000,000 35,200,000 7,682,300 12,500,000 18,300,000 1,970 82,730 7,426,000 8,059,000 1,027 32,820 9,638,000 10,200,000 1,356 1,084,380 4,212,000 7,588,000 8,456,510 96,000,000 162,000,000 465,400 6,614,000 13,500,000 9,220,970 21,300,000 29,700,000 3,082 748,800 9,496,000 14,400,000 1,925 9,327,420 818,000,000 1,220,000,000 69,000 1,038,700 22,600,00 39,300,000 7,445 318,000 5,515,000 14,300,000 42,430 4,9299000 5,262,000 514 276,840 5,970,000 11,700,000 1,421 995,450 33,100,000 59,300,000 304,590 4,606,000 5,125,000 404 550,100 50,800,000 58,000,000 8,080 257,670 504,000 1,125,000 349,270 77,700,000 81,900,000 8,758 128,900 8,793,000 10,500,000 2,068 2,973,190 548,000,000 946,000,000 71,943 1,811,570 118,000,000 197,000,000 68,890 2,950,000 3,632,000 453 294,060 53,800,000 579400,000 6,193 376,520 104,000,000 126,000,000 9,942 569,140 11,500,000 279500,000 98,730 31,900,000 45,500,000 12,653 94,080 4,518,000 10,000,000 1,090 328,550 10,900,000 21,100,000 6,304 2,030 826,000 19134,000 1,908,690 50,600,000 92,600,000 446,300 15,300,000 26,800,000 2,807 33,920 13,000,000 15,500,000 1,334 267,990 2,820,000 3,714,100 514 910,770 53,200,000 114,000,000 6,364 306,830 3,877,000 4,381,000 255 770,880 60,600,000 125,000,000 5,280 298,170 37,500,000 69,900,000 19043 91,500 9,044,200 9,930,000 2,100 Continued on next page
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From page 32... ...
Country 1996 Total Motor Vehicles ('000) 1970 Passenger Cars ('000)
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1970 Paved Roads (~000 km) 1996 Paved Roads (~000 km)
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Country 1996 Total Motor Vehicles ('000) 1970 Passenger Cars ('000)
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From page 35... ...
1996 Road Length (~000 km) 1970 Paved Roads (~000 km)
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From page 36... ...
1998. The Global and Domestic Impact of China Joining the World Trade Organization.
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