By Peh Shing Huei, China Bureau Chief

CHINA celebrated the production of its 10th million vehicle this year, cheering the breakthrough last month as a marker of its status as an industrialised country.

It is now ranked behind the United States and Japan in motor vehicle output. As state media Global Times said in an editorial: "Nothing better reflects the wealth and vitality of a country than automobiles."

That is quite true. But one glance at Beijing's choked roads, and one wonders if the country should not quickly slam the brakes on its cars. China is racing to be an auto powerhouse with nowhere to go.

Congestion has been the norm for major Chinese cities for years. But according to the China Central Television news, traffic in Beijing has slowed to 12kmh during peak hours, with some stretches dipping as low as 7kmh, setting a nationwide record for slow-moving traffic.

Shanghai averages 14kmh, Guangzhou 17kmh and even a second-tiered city such as Wuhan in central Hubei province creeps along at 25kmh.

Guangzhou estimates that traffic snarls waste 150 million hours a year and cause economic losses of 11.7 billion yuan (S$2.4 billion) a year.

The bumper-to-bumper traffic is also not helping air pollution.

In the capital, blue skies are magically conjured up by meteorological teams for major events such as the Olympics and the 60th National Day parade earlier last month. But for most of the rest of the year, air quality readings recorded by the American Embassy are usually in the unhealthy range.

The boom in the car population has much to do with the global financial bust.

In its eagerness to boost domestic consumption, the Chinese government tossed caution out of the window after the international financial meltdown of September last year.

If the preoccupation before last year's Olympics was to cool the overheating economy and ease congestion on the roads - especially in Beijing - the recession caused the Chinese government to do a U-turn.

It has been aggressively encouraging people to buy cars. It has introduced a slew of measures to make a set of wheels cheaper for the average Chinese. Tax reductions of 5 per cent on small-engine cars, subsidies for clean car technology and a concerted nationwide push for rural folk to buy vehicles at a cheaper price (qi che xia xiang) were introduced.

The measures were a resounding success. The increasingly wealthy Chinese middle class thronged the car showrooms. Unless a person has some guanxi, the waiting list to drive out a new car is usually as long as three months. After all, a China-made Chery QQ is available at only 40,000 yuan.

Car sales in the first nine months of this year hit 9.66 million, more than for the whole of last year. The government estimates that the final count for car sales this year will be 12 million. In Beijing, some 1,700 new cars hit the road daily.

China's total vehicle population as of last month was about 181 million, a jump of nearly 8 per cent from last year. The Global Times editorial asked pointedly: "The vision of a nation on wheels is certainly alluring, both for the government and individuals, but is China really ready for that?"

It has been working overtime to accommodate an expanding car population. For a country which built its first expressway only in 1988, China already has the world's second largest network of expressways at 53,600km. But as the experience of developed countries has shown, no amount of roads can meet an uncontrolled vehicle expansion.

With about seven people sharing a car now in China - compared with just two to a car in the United States - it can be expected that the number of vehicles in China would continue to climb.

China needs a vehicle management policy to either curb ownership or usage - or better still, both.

State media China Daily urged in an editorial: "Policymakers can no longer focus on encouraging auto production and sales while leaving more and more drivers to negotiate the roads at their own inconvenience."

One option is to extend the "Shanghai way" - limit vehicle purchase - to the rest of the country.

Since 1994, Shanghai has had a Singapore-style certificate of entitlement bidding scheme for new vehicles. Last month, 8,500 certificates were issued, averaging about 25,000 yuan each.

Alternatively, China as a whole can adopt the "Beijing method", which restricts vehicle usage.

Before and during the Olympics, the capital introduced a successful odd-even number system based on the licence plates, taking half the private vehicles off daily. After the Games, it was tweaked to the current last-number system, banning 20 per cent of the cars from hitting the roads a day.

Lastly, China can go with the "Guangzhou option", which has said that it is following the Singapore model of cordoning off the downtown area and charging drivers a fee for entering the zone.

In all likelihood, given the traffic conditions in these major cities, what would be required is a combination of all three.

Throw in the massive subway systems that are being built in major Chinese cities - Beijing will triple its 200km of subway lines in the next five years - and China might conceivably be a car giant not mired in traffic gridlocks.

But it has to move fast. Otherwise, the cheers of the production line and car showrooms would be matched only by the jeers of the drivers and passengers fighting for space and time every day on the roads of China.

shpeh@sph.com.sg

This article was first published in The Straits Times.

For more The Straits Times stories, click here.