Eight cities likely to introduce car-buying restrictions

The Chinese Government is to demand 116 more cities to disclose their air quality data after a damming report from MIT and Peking University.

The news comes as eight cities – Chengdu, Chongqing, Hangzhou, Qingdao, Shenzhen, Shijiazhuang, Tianjin and Wuhan – are set to join the ranks of environmentally conscious cities.  They are likely to introduce new restrictions on car purchases, according to Shi Jianhua, deputy secretary general of the China Association of Automobile Manufacturers (CAAM).

However, the industry group warned that the planned vehicle restrictions would curb auto sales by 400,000 units, or 2% of domestic sales in 2012, whilst failing to address the problem of polluting coal plants.

New regulations may put downward pressure on the economy at a time when the government is trying to stimulate growth, highlighting the fine line the party is expected to tread between economic and environmental development.

Yet, many believe the new regulations will have a limited impact. Sudden regulations could spark a round of panic buying, which would boost figures in the short-term, but with markets evening out over time.

Failing that, restrictions may apply only to polluting vehicles, offering room for growth in the nation’s sputtering EV and hybrid market. Alternatively, the restrictions simply may not happen at all.

Nonetheless, air pollution is still high on the government’s agenda, especially after a troubling report from the Massachusetts Institute of Technology and Peking University, which claimed people in northern China may be dying five years sooner than expected due to diseases caused by air pollution.

In response to the paper, Beijing has demanded that 116 more cities release their air quality data. It will then use the data to rank China’s cities according to pollution.

The US and China, the world’s top emitters of greenhouse gases responsible for 43% of global output, have agreed to five new initiatives to cut carbon from the largest sources, including heavy duty vehicles, manufacturing and coal-fired plants.

Despite being the largest polluters, the two nations have also spurred a 22% rise in global clean-energy investment, although overall investment is still well below the 2011 record.