The Chinese Embassy Web Editor’s Note:  We recommend an article published by The Washington Post on June 6, 2002. It describes a vivid picture of China’s booming car market. The following is the full text (download at : http://www.washingtonpost.com/wp-dyn/articles/A2630-2002Jun5.html ) :

In China, a Rush to Get Behind the Wheel
Washington Post Foreign Service
Thursday, June 6, 2002; Page A01
SHANGHAI -- The line of bidders begins to form just after sunrise. By mid-afternoon, when uniformed security police throw open the glass doors to the cavernous auction hall, the queue snakes down the entrance ramp, loops around the dusty parking lot and spills out into the street.

"One at a time! One at a time!" barks the guard inspecting registration papers at the entrance. "Don't shove! You'll all get in."

But not all will leave with what they've come for: license plates for their cars. Shanghai's municipal government instituted monthly plate auctions three years ago in an effort to stem the tide of private vehicles flooding city streets. As demand races far ahead of the monthly quota, Shanghai tags have become one of the world's most precious metals. At the May auction, the minimum bid required to claim one of 2,350 new plates on the block soared to a record 17,800 yuan -- about $2,150 -- rendering the tin squares worth far more, ounce for ounce, than gold.

Shanghai's would-be drivers decry the auctions as tantamount to highway robbery. And yet they pay. "Of course I think it's too expensive, but what am I going to do?" fumed 28-year-old commercial sculptor Ding Xiaofeng as he jostled fellow new car owners outside the auction hall Saturday afternoon. "If I bid too low, I don't get on the road."

Ding's eagerness to start driving is shared by a growing number of Chinese. With incomes rising and new-car prices falling, more and more of China's 1.3 billion people are sliding off their bicycles and behind steering wheels -- transforming established rhythms of life at home and creating new business opportunities for trading partners overseas.

Private car ownership remains a novelty in this burgeoning economy -- 1 in every 100 Chinese owns a car, compared with 1 in 2 Americans. And even the lowest-priced new passenger car still exceeds a decade's pay for a typical Chinese worker.

But industry experts see vast potential.

New-vehicle sales in China, which grew at double-digit rates for much of the past decade, topped 2.3 million last year. Passenger cars accounted for just under a third of that total. Many analysts put the proportion of vehicles sold now for private use at about 50 percent, up from less than 10 percent a decade ago.

And the boom is just beginning. As China's economy barrels forward, annual household incomes in the major cities are passing the $4,000 milestone regarded by manufacturers as a take-off point for private auto consumption. Automotive Resources Asia Ltd., a consulting company with offices in Beijing, predicts total sales will reach 3.7 million by 2006, with passenger-car sales exceeding 1.2 million units. China is widely expected to emerge as the world's largest car market in the next two decades.

Chinese banks are plunging into the auto-loan business, and competition among the global auto giants -- not to mention China's 120 domestic carmakers -- has sparked a furious series of price wars. The result: Car ownership is moving ever nearer the reach of this country's prospering middle class.

In major cities, private car ownership has spawned a new breed of commuters who motor proudly to downtown office towers from luxury housing developments in the suburbs. Among them: Shanghai accountant Sun Linlan, who recently purchased a Sail, a new compact model built jointly by General Motors and its state-owned Chinese partner. Sun and her husband already owned one family car, but his office is on the other side of town.

"I just got tired of standing in taxi lines on rainy days," she explained.

Ding, the sculptor, said his reasons for buying a boxy four-door Volkswagen Santana were "strictly business." Having his own car, he said, will make it possible to see more clients.

What a bore, scoffs Han Han, a 20-year-old Shanghai playboy who bought a Citroen two years ago with the proceeds from his first novel. Han has since bought and sold three cars and now drives a zippy Mitsubishi sports car. He couldn't care less that he's ridiculed in the Shanghai press as devoting too much attention to his ride and too little to his writing.

"My main interest now is cars," he said. "I want one of those big off-roaders next, or maybe a Lexus."

Han's zeal for wheels puts him at the vanguard of a new kind of cultural revolution. For centuries, inhabitants of this vast land have remained largely rooted to the village or town where they were born. Under Mao's Communists, individual mobility was limited by poverty, bad roads and a rigid household registration system.

Now, prosperous young professionals in Beijing form four-wheeling clubs to traverse the hinterlands of Yunan and Tibet, and Chinese of even ordinary means can contemplate the freedom of the open road.

News kiosks in Shanghai sport an array of flashy auto magazines alongside the People's Daily. In thriving industrial towns such as Wenzhou, Dongguan and Putian, it has become increasingly fashionable for parents of a new bride to offer a shiny new car as a dowry.

No wonder, then, that giant companies from the United States, Japan and Europe are piling in. General Motors Corp. and Ford Motor Co. have formed joint ventures with state-run manufacturers in China. Japan's Honda Motor Co. has been building Accords in China since 1999 and launched a new minivan in April. Toyota Motor Corp. and Nissan Motor Co. plan to begin production in China with local partners next year.

Everyone is scrambling to catch up with Volkswagen AG; the German automaker has been building cars with state-owned Chinese partners for more than a decade and last year claimed about half of all passenger-car sales.

China's entry into the World Trade Organization has fueled the auto craze. Terms of China's membership oblige Beijing to slash tariffs on auto imports to less than 51 percent over the next five years from 80 percent.

Meanwhile, Chinese regulators have begun granting foreign-invested ventures permission to manufacture family cars. GM's Shanghai plant, once limited to manufacturing $40,000 Buick sedans for chauffeuring Communist Party bigwigs and rich tycoons, now also turns out the Sail, a sporty compact priced from about $14,000.

But extra cars have brought congestion. In Beijing, cars and trucks now clog broad avenues that once teemed with cyclists. In Shanghai, tree-lined boulevards laid out in the colonial era have been all but overwhelmed.

China's Communist planners are scrambling to keep pace. Beijing has added ring road after ring road. Shanghai is building two major extensions to the recently completed Yanan Expressway and hopes to promote mass transit by stretching a costly, high-speed magnetic levitation train from the city center to the new airport in faraway Pudong.

Nationwide, the highway network has been expanded to 11,800 miles from 2,300 miles only a decade ago, slashing drive times between major urban centers. Beijing promises to connect all the nation's major cities with a 34,000-mile highway grid second in length only to that of the United States.

For now, however, much of China's highway network is either overcrowded, underdeveloped or both.

The surge in private car ownership in China warms the heart of Gordon Wu, whose Hong Kong-based construction and development company built and manages more than 185 miles of toll roads in southern China's Pearl River delta. Wu recalls the skeptical response he got from government planners when he proposed the first toll road in the early 1980s.

"They told me I was crazy," he said, shaking his head. "How come I wanted to build highways in a country full of people who could barely afford bicycles?"

Wu's said his China toll roads now collect $250 million a year and growth remains robust.

"More drivers?" he laughed. "Bring them on."

Shanghai's monthly license plate auctions are a crude -- and critics say cruel -- method of limiting congestion on city streets. With 13 million residents and an estimated 1.2 million licensed drivers, Shanghai has so far auctioned off fewer than 100,000 plates for private vehicles, according to reports in the official press. The minimum bid required to win one of the 15,900 licenses issued last year averaged about $1,400. In December, the final month of pre-WTO import duties, the minimum successful bid threshold briefly plunged to $665. But the ante has tripled since, even though the city has steadily raised the number of new tags up for bid.

The system seems designed for maximum chaos. In the final hour of bidding, there is a mad rush to get in the door. Participants claw their way inside the auction hall to one of two dozen dilapidated computer terminals where they must enter their registration number, password and bidding price.

To ease the confusion, organizers have set up a smaller auction room upstairs for auto dealers bidding on behalf of 10 or more customers. Within seconds after the doors flew open at the May auction, the chamber was a sweltering mosh pit, thronged by red-faced men and women clutching onion-skin registration forms by the fistful. Several scuffles required auction officials to act as referees.

The computers were switched off at 3 p.m. The bidding stopped, dealers and customers shuffled out into the lobby to smoke and wait. A few moments later, the entire crowd -- several thousand strong -- was allowed back into the main hall and fell silent as a trio of perspiring auction officials announced the minimum bid.

"Seventeen thousand eight hundred yuan." There was a chorus of cheers but many groans as well. Ding, the sculptor, went home exulting at his last-minute decision to bid 18,000 yuan -- 1,000 yuan more than he had planned.

But Li Kun, who stuck by his decision to bid no more than 12,800 yuan, trudged away in dejection. "This is no good," he muttered. "I have to try again next month."

Special correspondent Wang Ting contributed to this report.