China suffers from severe energy shortage
Li Hui

 

It is well known that "the country of bicycles" used to be a proper description of China. Yet now, we are gradually losing the designation. It is predicted that in 2004 total auto output will top 5 million in China, and the auto industry will maintain rapid growth for 20-30 years. Meanwhile, car ownership is expected to hit 33.56 million in 2005, 56.69 million in 2010, and 131.03 million in 2020. 

The sharp increase in the number of cars means the end to an era, and the "auto society" is around the corner. However, it is to trigger a swirl of contradictions revolving around cars.

It is an undisputable fact that China suffers from severe energy shortage. In 1993, China became a net oil importer. As the amount of imports is on the rise year by year, we have developed growing dependence on the international market for crude oil. Our energy reserves are far below the world average. Relevant data shows that in China recoverable reserves per capita of petroleum resources is merely 2.6 tons, as against a world average of 23.5 tons.

This trend will undoubtedly accelerate as cars become part of the common people's lives in this country. In 2000, motor vehicles consumed 65.6 million tons of oil in China, accounting for about one third of the country's total oil consumption. And demand of motor vehicles for fuel oil is projected to 138 million tons and 256 million tons respectively in 2010 and 2020, taking up 43 per cent and 57 per cent of the country's total oil consumption.

Energy shortage is a deep-seated problem faced by the global auto industry, but it takes on some characteristics in China. The first thing is backward automobile engine technology. Second, low fuel efficiency: At present, fuel efficiency of motor vehicles in China is generally 15 per cent - 20 per cent lower than that in the developed countries. Thirdly, relatively low oil price is also an important factor explaining why Chinese automakers and consumers do not pay much attention to oil consumption. At present, gasoline price is some US$0.32/liter in China. Yet even in the U.S., which is widely recognized as the country with the lowest oil price, the price hits $0.43/liter; in France, Germany and Japan, one liter of oil sells at US$1 or so.
 
Letting numerous households use cars and slowing down oil consumption constitute an unavoidable contradiction. To address this issue, Dr. Feng Fei with the Development Research Center of the State Council put forward a proposal of "policy combination": introducing advanced automotive engineering through international cooperation and market stimulation; raising China's fuel efficiency standard; introducing fuel tax; setting feasible standard to improve the quality of oil products. From the currently much debated scheme on turning monthly road maintenance fees into fuel tax and the annulment of reduction of excise levied on Euro-II cars, people can see the positive efforts made by the government. 

Air pollution caused by auto emissions will pose a second headache for China as it steps into the auto society. Some experts argue that although at present air pollution still consists mainly of coal smoke in this country, judging from the changing trend of the environment, automobile tail gas will replace coal smoke as the number one urban pollution source. This will become more evident among big cities with a population of one million or more. 

According to statistics, in 2000, the discharge amount of carbon monoxide reached 30 million tons in China, and that of nitrogen oxide 3.8 million tons. In the urban area of big cities like Beijing, Shanghai and Guangzhou, emissions from motor vehicle have become the number one pollution source. According to forecasts conducted by the State Environmental Protection Administration, in 2005 the percentage taken up by exhaust emissions from motor vehicles in urban air pollution will reach 79 per cent or so in this country. 

"Getting a car is not hard, but the traffic is". It seems that traffic congestion has become an issue for the whole society overnight. This is most notable in Beijing. Traffic is virtually in paralysis during rush hours along roads in the urban area. On some lanes hourly saturation reaches 95 per cent, and daily saturation exceeds 70 per cent, bringing down car velocity to some 10 kilometers per hour, which is equivalent to the speed of bicycles. 

Since the late 1990s, in China's many big cities, road building is outpaced by the growth speed of motor vehicles, and this trend will further intensify in the future.

The contradiction between cars and roads not only reduces transport efficiency, but also aggravates fiscal burden. In Beijing alone, this year a staggering RMB35 billion was spent in alleviating traffic congestion. Vehicle idling caused by traffic congestion aggravates environmental pollution and increases energy consumption. At the same time, traffic accidents are on the rise. In recent years, China has the highest traffic accident mortality in the world. In 2002, on average traffic accidents claimed 300 lives a day in this country.

Beyond any doubt, the three issues are testing China's auto society. In other words, the governance capability of the Chinese government has been put under test. The government finds it imperative to devote more efforts to balance the relationship between the following three tasks: meeting the demand of the growing middle-income groups for car ownership, propelling economic growth with the auto industry, and maintaining sustainable social development.