I wouldn't have expected China to be doing something like this.

I was in Guangzhou in 1999 - my impression at that time was that there were lots of motorcycles - a lot more than one would find in any American cities. Beijing on the other hand still had quite a few bicycles back then.

It would be quite interesting to see first hand what those cities are like now. I guess right now the price controls for fuel are distorting the market, so Chinese consumers aren't feeling any pain yet - Chinese oil companies are feeling lots of pain however...

It smells like money being passed under the table from dealers and manufactures who get bigger commissions from bigger engines going to local officials. Same reason that CAFE standards aren't raised here.

Is China subsidizing fuel? If so, anybody know what the current price is in USD? Are there any plans in China to ease off of the subsidies?

The government caps the retail price of fuel, so retailers are getting squeezed between the caps and the wholesale price.

So, as one example, fuel prices in Guangdong are up 16% percent, but Dubai crude (the Asian benchmark) is up 68%.

Fuel retailers and manufacturers are pushing for either a raising or a removal of the price curbs.

As of a few days ago, average pump price of gasoline in Guandong was 4.28 yuan a liter...that’s $0.528/liter or about $2.01 a gallon.

Re: subsidies, China started cutting obvious fossil fuel subsidies in the 90s. Petroleum subsidies fell from 55% in 1990 to 2% in 1995. In terms of more subtle subsidies...I don’t know.

The other explanation is that the powerful people own the cars with big engines and they want all the little ones off the roads so they have less congestion to deal with.

It's just the powerful making rules for themselves, as in every autocratic society ever.

Well I know the reason for the small car ban on truck roads.. trucks cant see em.

I know where I used to live the litter of small car bits was fairly deep from 18 wheelers running em over because they didnt see em at night or in foggy weather. Hell I was sitting in line waiting to get on the freeway when a little put put car was run right over by several trucks simply because the fool tried to pull out in front of a truck with over 100 tons of steel on its flatbed.

Also part of it is that in china alot of small cars arnt fuel eff not are they low pollution they are in fact powrered by crude 2 cycle engines that belch more pollution then an entire fleet of suvs and get amazingly bad mpgs.

wintermane, good point on 2-cycle engines.Let's ban them world-wide! Or if that seems too Draconian, at least raise emission targets so that it achieves the same thing.

I agree with wintermane, but what happens to more modern sub 1 liter cars like the chevy spark?

Evinrude sells a line on direct injection two strokes that has lower emisions than comparable four strokes. I don't know if emission standards for outboards are different than for cars. A worldwide ban on two strokes is ridiculous. What's needed is a world wide ban on stupid engineering.

What surprises me is that a newspaper in China is allowed to be that outspoken!

It does not seem logical that 84 cities in China have introduced restrictions on vehicles with small engines. If China expects to move from the bicycle to the auto era, these restrictions should be eased. It would seem that governments of these cities are interfering in competitive marketing by being biased toward cars with large motors.

Perhaps the influence of Detroit philosophy has subliminally infected the thinking of the political leaders. These policies have the effect of two steps backward to economic development in China.

adrianakau@aol.com

I have lived and worked in China for the past decade, focusing on the automotive industry. There are a couple of reasons for the restrictions on low dispacement engines in various cities:

1. Some (probably most) of the restrictions are made to help the local provincial economies. For example, Beijing passed a law that all new taxis must have a minimum 1.6L engine or larger. When the local government did this, many taxi cars made in other provinces automatically did not qualify, because they had smaller displacement engines. As a result, Beijing taxi drivers were convinced to buy a locally made car (which are Hyundais in Beijing, with 1.6L engines). So local policy ended up guaranteeing sales for the local car maker, which helped to guarantee local jobs and corporate and individual tax income for the local government. Similar laws (such as mandatory vehicle specifications --like a taxi's length or wheelbase) are written in other provinces for the same reason -- to help local carmakers, and the local economy.

2. In Beijing, the aversion to small cars is also a "face" thing; they don't want small vehicles running around the capital city, because it doesnt look good to foreigners. This is the same for other large cities.

Also, Beijing tends to lead in China. So if the Beijing municipal government passes a law, then many other cities will follow Beijing's lead.

A couple of comments:

They don't sell 2-stroke cars in China (there are plenty of 660 and 800cc cars, but all four stroke). There are millions of two-stroke farm vehicles, but you will almost never see them in the city.

The reason the newspaper can be so outspoken is because it is the People's Daily, the mouthpiece of the central government. The central government is using the editorial to chastise municipal or provincial government leaders for passing such local laws, when the central government is trying to encourage automakers to make, and consumers to buy, more fuel efficient vehicles. (Yes, I know it seems contrary for Beijing to restrict these small displacement vehicles in their own city, and yet expects other cities to accept them. But when you are the big potato, you don't always have to make sense).

There will be a fuel tax introduced in China in 2006, you can write it in stone. It will be introduced gradually, probably starting at 10 percent and climbing upwards over time to perhaps 20-25 percent.

China's government is leaning more to the European attitude toward fuel economy -- that the freedom that a personal car provides is a privilege, and comes at a cost -- instead of the US attitude that car ownership and access to cheap gas are two basic human rights.

China is getting ready to introduce minimum fuel economy standards for cars, based on their curb weight. If the automaker sells a car that does not meet minimum fuel economy for its weight class, either the automaker will be fined for each unit sold, or the consumer will have to pay a additional "luxury tax" on the car. This should cause automakers to make more fuel efficient cars, and consumers to seek them out.

Interesting theory that the restricitons are being put in place to protect the small vehicles from large trucks. Lord knows the Chinese need more safety: In 2004, there were 110,000 auto traffic fatalities in China, more than double the next highest country in the world (the USA). The statistic is even more devastating when you consider that China has a car population of about 20-25 million vehicles, while the USA has more than 250 million vehicles on the road.