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Spinning the Wheel

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The lucky ones

Roll up! Roll up!  Hang on a minute… the odds are that people in this particular lottery won’t be rolling anywhere anytime soon.  The capital city of the nation that outlaws gambling (with the exceptions of state and provincial-run lotteries of course, not to mention the rollercoaster stock exchanges) announced today that it will introduce a lottery for car registrations from January 1st.   

But blogs and forum bulletin boards all over China have been buzzing with news of the impending legislation for at least two weeks.  The question on many people’s lips is, which city will be next (and when)?  

   Another hot question is, what’s the point of denying people the right to buy a car when there are other – far more effective ways – of reducing traffic congestion?   The reality of course is that the measure has not been designed to reduce snarl ups.  That was never the aim.  The people behind the scheme have a far more modest ambition:  to slow down the rate of growth of future registrations. 

   At the end of 2010, the number of Beijing-registered vehicles is likely to hit the five million mark; 900,000 of which would have their ‘jing’ number plates registered this year (‘jing’ is the character on the plate that signifies Beijing registration). 

   Next year’s cap has been set at a ‘mere’ 20,000 vehicles per month (240,000 vehicles in total) – perhaps about a quarter of 2011’s potential demand.  That doesn’t seem a lot, bearing in mind that 30,000 vehicles were sold last week alone as panic buying spread all over the city after word of the impending legislation got out.   

   Which brings me to the blow that will be dealt to the economy generally and the auto-industry in particular:  The economic ‘loss’ of about 750,000 car sales is significant.  Just as significant is the effect on the psychology of the business planning of the auto-companies – if Beijing can install such a drastic measure with only a few days ‘official’ notice, then what’s to stop a dozen cities or more changing the rules at a moment’s notice. 

   The long supply chain of car manufacturing necessitates that production is geared-up and geared-down slowly and smoothly, and that the expenditure levels of marketing activity is set months ahead of the planned-for sales shift.  Auto-companies plan years and quarters ahead, not weeks and days.  So, if the policy is suddenly rolled out to other cities, the rapid turning of the auto-production supply tap from full-flow to a trickle will have severe consequences.

   If, on the other hand, the policy is not rolled out beyond Beijing, then the auto-makers’ suffering (and the suffering of the economy that relies on them) will be manageable – although the companies who sell proportionately more volume in Beijing will of course be worse off than their competitors whose sales are not so reliant on customers in the capital.  That said, if you were the boss of an auto-company, would your China 2011 (excluding Beijing) plan be bullish, or would you gear-down production just in case?  If you were the owner of a car dealership in Beijing, however, the future is less uncertain – it is unquestionably bleak. 

   If other cities don’t follow suit – and I believe they would be ill-advised to do so – then one of the Beijing government’s most unpopular policies in recent times will become even more unpopular.  Watching people in the comfort of their cars drive past you as you stand at a bus stop or wait for a taxi on a frigidly cold Beijing night is one thing, but – for would-be car owners who haven’t won the number plate lottery – the feeling of injustice would be compounded if Beijing were the only city to treat its citizens in this way.

   Ms Jin is one of the millions who are upset by the new legislation.  She writes on her blog, “I started working three years ago after leaving university, and have been saving up for one ever since.  I was hoping to buy a car next year, but now I realise I have to try my luck in the lottery.  I’ve never won anything in my life, so I don’t hold out much hope.  It’s so unfair.”

   What Ms Jin doesn’t realise, however, is that she won’t even be allowed to enter the lottery.  According to her blog, she is from Xi’an, and will therefore have a Xi’an hukou (registration document).  She is what is termed a waidi (an outsider) and as such she will be barred from registering a vehicle in Beijing from January 1st.  It makes no difference that she studied in Beijing for four years and has lived in Beijing a further three years. 

   This new vehicle legislation is just the latest example of discrimination against the millions of waidi in the capital, who are denied the privileges that many people with a Beijing hukou take for granted. 

   The damning criticism of the policy thus far from Beijingers and from the waidi  who have worked out that they are to be barred from entering the lottery – has already caused one high profile head to roll.  When harmony has been so disrupted; someone – whose position is high enough to send a signal to others, but not so high as to upset the order of things – must be blamed and publicly humiliated.  

   So, spare a thought for Huang Wei, a former vice mayor of Beijing municipality, who has been unceremoniously transferred from Beijing to the north-west-frontier region of Xinjiang – more than 4,000km from the capital.  Assuming he is driven there and that he gets to keep his Beijing-registered car, then at least that will be one car fewer to clutter Beijing’s roads.  There will also be one car fewer with a municipal-government licence plate (700,000 of which are reported to be on Beijing’s road) to upset the people in the long queues for a Beijing bus or taxi.

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The "Jing" cherished plate