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Saturday, June 10, 2006

The Bigger the Better- Not this time!!!

Written by: S.M.Mehdi Hassan

China banned small cars ten years ago from now. Government officials thought that too much small cars would cause traffic jam in the streets. Now, the scenario has changed a lot. Rapid industrialization and booming middle class created huge demand for oil which has made the Chinese policy makers to change their strategy. Because of the raising price of fuel and increase in the number of vehicles China has now decided to reintroduce small vehicles with fuel efficient engines.
At present, in terms of fuel consumption, USA is in the first place and then China and Japan. The interesting thing is both China and Japan consume equal amount of fuel but China has a huge population and its transport and communication sector is growing at a rapid pace which would account for 60% of the total fuel consumption by 2020. In order to stop people from buying fuel inefficient big vehicles Chinese government imposed higher taxes on big cars and SUVs. Chinese policymakers are now facing a three phase problem- First, lowering the number of vehicles; Second, increase the standard of emission; Third, not hurting the growth of automobile sector, one the most profitable sectors of China.
According to Xinhua news agency low emission cars are now ranked top seller in China. China also raised its fuel price which created lots of tension among people.



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