China Transportation Briefing: Stemming the Tide of Private Autos in Guangzhou

On June 30, Guangzhou’s municipal government announced it would implement a vehicle registration quota in order to address the city’s congestion problems and air pollution. As this forthcoming policy combines elements of Beijing’s and Shanghai’s vehicle restriction experiences and clean energy vehicle incentives, it could reduce gridlock and encourage the usage of new, energy efficient cars. The synergy between this policy and the progress of public transit development in Guangzhou might bring positive change to the city’s urban mobility system.

Guangzhou is not the first Chinese city to implement a vehicle license control policy. While developing countries usually face the choice between supporting the auto industry as a pillar of economic growth and curbing vehicle usage that inevitably leads to traffic congestion, several Chinese cities have taken action by starting to control car ownership growth. The most notable cases are vehicle plate auctions in Shanghai — which started as early as 1994 — and the vehicle license lottery, or Yaohao, in Beijing. Shanghai’s vehicle registration restriction started as early as 1994. It is a monthly auction system granting car registration rights to the highest bidders — currently the price of a vehicle license plate is over US$9,000. Beijing’s vehicle quota, by contrast, was not in place until this past February when traffic congestion had already been long entrenched. The Yaohao lottery gives new car buyers the opportunity to win a car license at no charge, yet only about 2 percent of entrants are granted the right to drive in Beijing.