NEWS > Business
Costly car consumption
2007-09-24 02:50:14  China Daily      

As the world's second-largest consumer and the third-biggest producer of cars, China will certainly continue to develop its own auto market, which is now reportedly the No 1 potential market for almost all carmakers around the world.

The benefits of a booming domestic auto market are huge. But the environmental and energy costs of unchecked car ownership are also tremendous. Policymakers should quickly come up with proper market incentives to balance the growth of auto consumption with the need to protect the environment and save energy.

In the first eight months of this year, vehicle sales rose by a quarter, boosted by the fast growth of the national economy as well as carmakers' new product offerings and price incentives. It is estimated that full-year sales will exceed 9 million vehicles, up from 7.22 million last year.

This surge in car sales has enabled many Chinese people to realize their dream of individual mobility. More important, it also means more jobs and a considerable boost to domestic consumption.

By the end of last year, the output of the domestic auto industry accounted for 3.7 percent of the country's gross domestic product. And auto-related industries altogether created one-sixth of the nation's employment.

Car sales take on even greater importance when one considers that they help the country reduce its dependence on investment and exports for economic growth.

Despite of all the benefits represented by the fast growth in car consumption, however, the negative consequences of being a country on wheels are also becoming increasingly evident.

On one hand, a surge in the number of vehicles on the road will add to the country's thirst for oil. One the other hand, it has already made the country the second-largest greenhouse gas producer in the world after the United States.

It would make little sense to put a blanket curb on car consumption in the face of such strong demand simply because of energy and environmental concerns. Yet, it is also irresponsible to encourage car sales without considering the likely impact on energy security and the environment.

Campaigns like car-free days are needed to raise public awareness of the severity of the energy and environmental problems caused by excessive car ownership.

But to address these problems, policymakers should ultimately resort to market incentives, and not rely just on public awareness. For instance, a fuel tax that is collected according to mileage is long overdue to replace the outdated road toll that is charged regardless of mileage.

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