In addition to constructing a world-class subway system, Shanghai has for a number of years (some reports say “mid-80’s” others say 1994) imposed a system which helps to limit the number of cars on its streets. If you want to buy a car in Shanghai, or more accurately, if you want to obtain a license plate for a car in Shanghai, you have to participate in a monthly auction.
The numbers of plates up for auction has fluctuated over the years. In 2000, 1,000 license plates per month were auctioned. In the past several years, the monthly total has fluctuated between 5,000 to 8,000. In February 2009, 6,000 plates were auctioned.
Prices have also fluctuated in recent years. Average bids have ranged from a low of around 23, 000 yuan (US$3,365) to a high of over 56,000 yuan (US$8,193). In February 2009, the average bid was 27,552 yuan (US$4,031).
It is really hard to believe, but there were only 8,000 car owners in Shanghai at the end of 1999. There are many more today, but as of the beginning of 2008, the auction system was credited with keeping 1.5 million cars off of Shanghai’s streets. A recent article in Yale’s environment 360 noted tha “[w]ith about the same population and wealth as Beijing, Shanghai residents own only one car for every six in Beijing.”
The system isn’t perfect (only the wealthy can buy cars, and some Shanghainese skirt the system by buying their cars in neighboring provinces), and its effects are not always obvious (such as when you are reduced to a dead stop on the A4), but the fact is without the auction things would be much worse.
Shanghai has resisted strong pressure from the national government to scrap its auction. In 2004, for instance, Assistant Commerce Minister Huang Hai publicly announced that Shanghai’s auction violated national rules and hurts car sales. “The car is a commodity that a modern society can’t be short of,” Mr. Huang said.
In a worrying development, however, Shanghai Daily recently quoted Huang Rong, director of Shanghai Urban Construction and Transportation Commission, as saying that the car plate auction will be canceled as the city improves the transport system. Fortunately others appear skeptical of this claim:
[I]ndustry sources said the city is not likely to abolish the system in the near future as it wants to control its vehicle population to reduce pollution and traffic congestion particularly with the 2010 Shanghai World Expo approaching.
There have been suggestions that Shanghai will implement a congestion pricing system for vehicles inside the inner ring road. This policy should be in addition to, not in lieu of, the auction system.
As Chen Xiaohong, a professor of the transportation engineering school of Tongji University, succinctly put it :
For such a big metropolis like Shanghai, the priority is definitely public transport, and there is no other choice.
11 responses so far ↓
1 Rob Earley // Mar 23, 2009 at 2:28 pm
I’m all in favour of the “in addition to, not in lieu of” limits to automobile transport.
In my opinion, the fuel tax should have been such a limit. When the added the fuel tax and eliminated the 6 vehicle fees, they reduced the cost of owning the car - which is apparently a larger deterrant to car ownership than gasoline prices.
If people have cars, they’re more likely to drive them!
2 cmcelwee // Mar 23, 2009 at 5:13 pm
Rob, thanks for clarifying the effects of the tax vs. fee swap. I had a feeling that it would actually lead to more car purchases, but its good to have it confirmed by an expert.
3 Vance // Mar 23, 2009 at 7:31 pm
Great post! FYI, here are the 1999 car ownership totals from the NBS 2000 Online Yearbook: http://www.stats.gov.cn/ndsj/zgnj/2000/O29c.htm. It shows 24,600 total privately owned vehicles in SH at end of 1999, of which 21,400 were cars + buses (not differentiated).
4 Xiaomei Tan // Mar 23, 2009 at 11:11 pm
It took my brother three attempts to get his license plate. I believe the system does reduce or at least slow car purchases.
5 Greg // Mar 24, 2009 at 5:37 am
Does that 8000 car figure come from the actual number of total auctioned plates or a statistical sample? I know plenty of Chinese who buy used cars from friends and family and pay extra to keep the plate. I don’t think they have a yearly renewal thing like US states do.
And all of those Anhui, Jiangsu, Zhejiang, Beijing and Guangdong plates on old VWs and local brands surely can’t be out of town visitors
6 cmcelwee // Mar 24, 2009 at 2:57 pm
@Vance: thanks for the Yearbook cite! 24,600 is still a small fraction of the vehicles today, but its a little more believeable than 8,000.
@Xiaomei: thanks for the real life example! Good to have some confirmation that the system is working at least to some extent.
@Greg: I think the number of plates auctioned is an “actual” number. As you point out there is a thriving blackmarket and ways around the limit. I don’t see many Anhui plates on the road, however; a 皖 on your tag can’t gain you much repsect on the streets of Shanghai.
7 Dayton // Mar 24, 2009 at 3:03 pm
hmmm, where does all the money go from the auction revenues? Increased vehicle emission testing/enforcement and safe driving programs might be good starting places….
8 cmcelwee // Mar 24, 2009 at 3:17 pm
@Dayton: the money collected at the auctions is supposed to be used for road construction (bad) and development of the public transportation system (good). I haven’t seen a breakdown on how the money is actually spent.
9 Greg // Mar 25, 2009 at 11:03 am
Actual emissions inspections would be good. But there is no way that Shanghai has only 8000 cars, even with bootleg plates from other locales. There are more cars than that on the ring roads at rush hour.
10 cmcelwee // Mar 25, 2009 at 11:27 am
Sorry Greg, I haven’t been very clear. The 8,000 figure I cited was for the total numbers of cars in Shanghai in 1999, although Vance has provided us with the China Yearbook numbers which report 24,600 vehicles in Shanghai in that year. Recent monthly auctions of new plates have put 5,000 to 8,000 on the block. Heck, I’m almost run over by more than 8,000 cars on my walk from work to the subway station.
11 Ev // Nov 5, 2009 at 1:58 am
Does this cap include plates for motorcycles?
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