Cars

Auto sales boom brings challenges

(Xinhua)
Updated: 2010-10-13 11:13

This means China's auto sector growth should rise less than 13.5 percent, since GDP expanded by 9.1 percent in the past year.

But according to Edward Prescott, the Nobel Economics prize winner in 2004, China's vehicle production and sales may both range as high as 40 million units by 2020, and reach 75 million in 2030.

Chinese officials had also warned that an unchecked expansion of China's auto industry encouraged by local authorities could harm the wider economy, and that excess capacity must be "resolutely" stopped.

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Chen Bin, head of industrial coordination at the National Development and Reform Commission, the nation's economic planning body, said last month at a forum in Tianjin that local governments had been making "blind" efforts to open new factories and expand capacity, which could hamper sustainable development of the national economy.

In Beijing, auto emissions were responsible for 50 percent of the city's gaseous pollutants in 2009, he added.

He said local authorities should avoid setting unrealistic output quotas for auto makers, and should end preferential land and tax policies for them.

He said the government should also strengthen supervision of industrial efficiency data to guide reasonable resource allocation.

China's auto industry is not only facing the tough task of boosting domestic consumption, but is also responsible for maintaining sustainable and coordinated economic and social development, Chen said.