China urges loosening car quota rules in consumption boost plan

BEIJING - As part of broader efforts to stimulate domestic demand, China has called on cities to further refine their automobile quota systems to better accommodate households without cars of their own, following a series of favorable policies rolled out across the world's largest auto market.

The country on March 16 made public a plan on special initiatives to increase consumption. This plan, issued by the General Office of the Communist Party of China Central Committee and the General Office of the State Council, calls for shifting auto consumption policies from "purchased-based controls" to "usage-based regulation" and ensuring car ownership eligibility for families that have been unsuccessful after long waits as part of the car lottery system.

Metropolises in China, including Beijing, Shanghai and Guangzhou, have long placed ceilings on car purchases by adopting car lottery systems to combat traffic jams and air pollution, while in recent years, local governments in these and other cities have been introducing new policies to meet increasing demand and raise the quota of new energy vehicles (NEVs) in the car license quota allocation process.

In January this year, Beijing's transport authorities announced that 100,000 passenger car license quotas would be allocated in the Chinese capital in 2025 -- 80,000 of which will be for NEVs.

Notably, Beijing will this year also issue an additional 40,000 NEV license quotas aimed specifically at households with no cars of their own. This selection will be based on a point-based ranking system, rewarding those who have been waiting for a long time and prioritizing fairness.

Similarly, Tianjin Municipality in north China released 30,000 quotas for carless households in 2024, while Hangzhou, a tech hub in China's eastern Zhejiang province, has relaxed its eligibility criteria to allow individuals who have applied unsuccessfully at least 48 times to receive alternative car license quotas.

Shanghai, also in East China, a city which uses an auction system to sell a limited number of license quotas to fossil-fuel and hybrid car buyers, is another location which has sought to lower barriers to car ownership.

The economic hub's authorities said at the end of last year that the city would reduce its contribution requirement periods in terms of the social security fund and the paying of individual income tax by non-local residents from three years to one, thereby expanding access to car licence quota auctions.

Jia Xinguang, executive director of the China Automobile Dealers Association, said that given the plan released on March 16 -- related cities can further boost consumption by encouraging citizens to trade in old vehicles.

Regarding the "usage-based regulation" noted by this plan, cities including Beijing, Shanghai and Hangzhou have already enforced plate number restrictions, along with tech-enabled traffic solutions.

In the case of Hangzhou, an AI-powered "City Brain" monitors the city's traffic in real time and issues alarms for potential congestion, enabling traffic authorities to adjust traffic lights based on vehicle flow. With more than 3,700 parking lots linked to the platform, citizens can park their cars more easily, enjoying a seamless experience that allows them to "pay after parking," thus preventing traffic jams caused by parking problems.

"Due to frequent traffic jams, I had long been hesitant to buy a car. But with improvements in traffic management, I'm now considering giving it a try," said Li Xiang, a Hangzhou resident.