Editor's Note

With the increasing need for vehicles and growing awareness of environmental protection, China is faced with the problem of improving transport efficiency while controlling auto emissions. The problem of how to strike this balance will be addressed at the ongoing annual legislative and political consultative sessions. The Global Times discusses three key concerns in China's auto industry. 

Taxi industry reform

Li Shufu, a member of the Chinese People's Political Consultative Conference and chairman of auto manufacturer Geely Holding Group, raised a proposal on reforms of the taxi industry after submitting similar proposals in 2013 and 2014, according to a post on Geely's Sina Weibo released on Monday.

The traditional monopoly of the taxi industry should be broken and the market allowed to lead the sector, Li said in his proposal.

It will be hard to change the franchise model seen in the taxi industry since large financial interests are involved, Zhao Zhanling, a legal counsel with the Beijing-based Internet Society of China, told the Global Times on Tuesday.

In China, local governments decide the number of taxis that are allowed to operate in a city and governments distribute taxi licenses to local companies but not to individuals, Zhao said.

Taxi drivers then have to pay a monthly franchise fee to the taxi companies that employ them.

Beijing-based newspaper Beijing Morning Post reported on January 15 that the average monthly franchise charge per car is about 6,200 yuan ($991) in Beijing.

Under pressure from this high franchising fee, some taxi drivers only choose passengers that can maximize their profits, leading to complaints about taxi services.

Recently unsatisfied passengers have turned to car-hailing services, which are ruled by ambiguous regulations in China.

With better services and only slightly higher charges than taxis, car-hailing services are forcing the taxi industry to make changes, Zhao said.

The franchise fee and new competitors have pushed taxi drivers to take actions. Thousands of taxi drivers in Shenyang, capital city of Northeast China's Liaoning Province, went on strike on January 4.

Similar strikes also followed in other cities afterward.

Li suggested breaking the taxi companies' monopoly of taxi licenses and allowing taxi drivers to apply for the license directly from the government.

Meanwhile, the number of taxis should be decided by market demand rather than the government, according to his proposal.

Opening up the taxi industry to free competition will greatly increase the efficiency of taxis as a public transport tool, which is essential to Chinese cities, according to Zhao.

Yang Chuantang, minister of Transport, told reporters during the ongoing two sessions that guidelines for taxi industry reform are expected to be released in the first half of 2015 without revealing further details, the Xinhua News Agency reported on Thursday.

Doubts over policy

Faced with increasing population and heavy traffic, many Chinese cities resort to limiting vehicle ownership, but the policy has caused doubts and dissatisfaction.

Shenzhen in South China's Guangdong Province is the latest city in China to have introduced a car purchase limit policy.

Starting from 6 pm on December 29, 2014, the city began curbing auto purchases for an initial period of five years, during which there will be an annual vehicle ownership quota of 100,000, the local traffic police announced on its Sina Weibo account on the same afternoon.

However, the local traffic police had declared several times in 2014 that Shenzhen had no plan to set car purchase limits and described the online speculation as "rumors."

As a result, when the announcement was released without any warning, Shenzhen was criticized for harming the government's credibility.

Shenzhen's sudden announcement widens the number of cities with limits on purchases of new vehicles to eight from the existing seven, which are currently Beijing, Shanghai and Tianjin municipalities; Guiyang, capital of Southwest China's Guizhou Province; Hangzhou, capital of East China's Zhejiang Province; Shijiazhuang, capital of North China's Hebei Province; and Guangzhou, capital of Guangdong Province.

The decision-making process for car purchase limits lacks public discussion, Wang Fengying, a deputy of the National People's Congress (NPC) and president of Great Wall Motors, said in her motion enhancing transport management e-mailed to the Global Times on Wednesday.

Zong Qinghou, chairman of Chinese drinks giant Hangzhou Wahaha Group, submitted a motion to the NPC session, suggesting that auto purchase limits be called off.

The car purchase limit did not solve the problems of traffic jams and air pollution but only held back the development of the auto industry and brought inconvenience to people's daily lives, according to his motion sent to the Global Times on Monday.

New-energy vehicles

A wide discussion about combating smog is ongoing in China, leading to more attention on new-energy vehicles.

China has adopted a series of preferential policies to promote new-energy vehicles, including easier access to car licenses, purchase subsidies as well as tax exemption.

Beijing has set up a separate car license pool for new-energy cars to apply for and Shanghai is even giving free car licenses to new-energy cars, while a license plate for gasoline cars can cost about 70,000 yuan.

From September 2014 to January 2015, about 42,800 owners enjoyed a 10 percent purchase tax exemption, the Ministry of Industry and Information Technology said on February 19.

To encourage the use of new-energy vehicles, local governments have also promised to build a wide charging network.

The number of electric-vehicle (EV)charging stations in Beijing will be doubled by the end of 2015, Xinhua reported on February 11, citing Beijing Municipal Science and Technology Commission.

Zhang Tianren, a NPC deputy and chairman of battery maker Tianneng Group, suggested in his motion encouraging the use of micro-sized EVs in third-tier cities and rural area while setting up regulations and standards for the manufacturing industry, according to the group's website.

The China Association of Automobile Manufacturers said in January that the sales of new-energy vehicles surged by 324 percent to 75,000 units in 2014 from a year ago and will see robust growth in 2015.