China’s auto industry takes off

Pitfalls of motorization
Yet for all of China’s big ideas for the auto industry, there are obvious pitfalls — namely the insatiable appetite for oil and in turn, the resulting pollution.

“In the medium- and long-term, fuel consumption and its availability, together with environmental and infrastructure concerns, represent the major constraint to growth,” said analyst Ashvin Chotai of Global Insight.

Chinese experts have calculated that domestic cars, which accounted for 10 percent of oil consumption in the mid-'90s, could burn 40 percent by 2010. That could translate into China depending on imports for 70 percent of its oil needs, a dangerous prospect given the tight and expensive global oil supply.

“We are not ready for massive motorization because we have to take into account our huge population and energy supply,” said Dr. Chen Jian, director of the Contemporary China Research Center at Tsinghua University.

Vehicle emissions have also become the largest source of urban pollution, with the state Environment Protection Administration warning that motor exhausts could account for 79 percent of total air pollution in China.

Beijing, which is struggling to hold a "green" Olympics in 2008, has the worst air pollution of any major city, registering 145 micrograms of dust particles per cubic meters in 2005, seven times the WHO-recommended limit of 20, according to one Asian Development Bank report.

The U.S. now accounts for nearly a quarter of the global emission of carbon dioxide, the primary culprit for global warming. China’s rapid industrialization and motorization could make it an even bigger emitter of carbon dioxide than the U.S. by 2010, environmental campaigners warn.

“The Chinese government has been focusing too much on growth, and it is already a little late in making the growth more sustainable, with pollution already getting to irreversible levels,” warned Chotai of Global Insight.

Biggest problem: parking
Congested roads are now most evident in Beijing, with its vehicles approaching 3 million this year, and 3.5 million by the time of the Olympics, even as 2.5 million bicycles also vie for limited road space.  

But the city has only about 1 million certified parking spots, said Liu Xiaoming, deputy director of Beijing Communications Bureau. Infrastructure planning for the 208 Olympics only prepared for 2 million vehicles.

“My greatest headache is parking,” confessed Sha, the first-time car buyer. “My wife will probably have to park on the sidewalk as all parking spaces in our housing compound are full."

Big cities may have problems, but most of China can still accommodate more cars, arguedYale Zhang, director of Greater China Vehicle Forecasts, citing inland second- and third-tier cities.

“Notice the speed with which China built more highways, every year,” he said, projecting that China’s local governments will build subway system and mass transit even as more private cars take to the streets.

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