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China embraces small, efficient cars
(Reuters)
Updated: 2006-06-09 16:30 What Price Efficiency?
Authorities worried at public
discontent seem to have balked at taking the final step in curtailing a culture
of ostentatious consumption -- raising state-set price caps that keep fuel costs
below most Western levels and drivers behind their wheels.
"As people
get better off they are worrying more about quality of life. They do get used to
cheap energy though, as you see in Russia and the United States," said Rob
Watson of the US-based Natural Resource Defence Council.
Diesel and
gasoline prices are currently set by the government, which has held them below
global rates.
Those concerns remain despite more aggressive but
successful moves by others in Asia such as Indonesia, which cut consumption by
20 percent after nearly doubling fuel prices last October, but only faced muted
popular protest.
Gasoline in the Chinese capital costs about US$2.40 a
gallon, around 50 cents less than the average retail price in the United States
last week but half the price in much of Europe.
The handful of increases
from the start of 2005 -- totalling around 33 percent, while crude oil climbed
around 60 percent over the same period -- have yet to make a dent.
China's implied demand for gasoline rose 10.2 percent in the first four
months of this year to 1.2 million bpd, while diesel consumption climbed 7.0
percent to 2.3 million bpd, data showed.
And officials have shied away
from fuel consumption tax, which has encouraged economy in much of Europe.
Tighter Standards
But a new round of taxes
on the most polluting cars, which rise to 20 percent for engines above 4.0
litres and cover sports utility vehicles (SUVs), is shaping consumers' choices.
Low-emission cars accounted for half of the 10 best-selling models in
the first five months of the year, the Xinhua news agency reported earlier
this month.
And as part of an ambitious drive to bring car and housing
efficiency standards to leading international levels by 2010, another round of
fuel economy standards will come into force in two years, after a first phase
was introduced last year.
"Almost all vehicles being made and built in
China could meet the phase 1 standards... but almost no vehicles being made
could meet the phase 2 standards. These are pretty severe, among the toughest in
the world," said Tim Dunne, managing director at Beijing-based Automotive
Resources Asia Ltd.
In comparison, the US has not raised car efficiency
standards for 16 years, although in March it announced plans for a modest rise
in SUV fuel economy, to come into force by 2011.
China is stricter than
the United States and Japan on economy standards for heavier vehicles and SUVs,
but softer on lighter end vehicles, research by Wu Wei and Jin Yuefu of the
China Automobile Technology and Research Centre shows.
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