User:Evan pizzurro/Feature: China's maturing auto market gives rise to car culture

China's Car Culture
China has quickly gone from a nonindustrialized, bicycle dominated country to the biggest industrial car market in the entire world. Looking beyond just the automotive industry, China's car culture refers to the cultural, social, economic and political implications that surround owning a car in China. China in the Mao era had a very small emphasis on cars. The Chinese mostly lived on farmland as developed cities and highways were rare and spread out. In the recent decades, China has experienced a large increase in consumerism because of Deng XiaoPing’s commitment to opening up the economy. Seemingly overnight, China’s car industry boomed with prominent car companies such as Volkswagen and Peugeot coming to do business in China. As a result, the Chinese consumer population adjusted to this rapid rise in cars by developing a culture around owning them. The car culture has created social implications associating cars and wealth as well as environmental consequences associating the rapid uptick in cars to the rapid increase in China’s air pollution. At first, the car culture in China was seen as a great economic piece for development. China needed to industrialize and the automotive industry was a key facet that allowed for China to build its infrastructure and drastically increased its economic output. However, as China has developed, the country’s car culture has begun to cause more problems than benefits. This has forced China to begin to debate the tough questions that come along with the current trends their automotive industry is on. How much longer does China allow their car industry to rise before making drastic changes. When does environmental consciousness take precedence over economic benefit. These are just some of the questions that encompass the social, economic and political implications of China’s emerging car culture.

1976-1997
In Mao’s China, industrialization of cars was an afterthought as cities were much less prevalent than farmland. In the early 1980s, out of the country’s 800 million people, China only had one car for every 1,200 citizens. Bicycles were the main form of transportation as local transportation was much more important than country-wide transportation. In the early 1980s, Deng XiaoPing made a commitment to opening up China’s economy. More growth led to a rise in cities, transportation and overall wealth. As a result, China made a conscious effort to create a market dominated by a limited amount of international joint-venture assemblers producing to world standards. China’s car production has since increased annual vehicle output from less than 2 million in 1990 to north of 9.5 million in 2008 (8). This rapid increase in cars is in part due to the rise in the economy, but it also is due in part to the additional value that the Chinese placed on cars. The rise of the car industry aligned with this rise in consumerism and the idea that cars were now a sign of not just transportation but also wealth and social status. The commitment to manufacturing, coupled with this new value place on cars, created a constant domestic demand for cars.

1997- Present Day
As China has risen economically, so has their desire for luxury and passenger cars. From 1997-2021, China sold an average of around 1.1 million cars a month, with the highest being roughly 3 million in December of 2017 (7). There has been a steady increase in the demand for cars since China’s consumerist ideals have grown. The capital in China has skyrocketed in the last three decades and with that money comes more desire for products like cars. According to TradeEconomics, below is China’s car sales per month since 1997. Sales have risen consistently since the company opened its doors and started to accumulate capital (23). Now that there has been a culture built around buying and owning cars, the environmental and social questions that come with hundreds of millions of cars on the road are now one of the biggest questions for the government to solve in the coming decades.

Social Significance
Seeing the potential economic possibilities of an international car market, China encouraged its population to desire cars. As consumerism grew in post-mao China and the average person was getting their first sense of real wealth, cars became the symbol of elevated social status. Owning cars became more than just a form of transportation but also a sign of social wealth. A car culture emerged where people tried to emulate the rich by buying cars and also had a resentment towards those that owned cars. During the 50s, communist China vilified the wealthy class. Therefore, there was always a culture in China that had a hatred and an envy towards the upper class. It was thus no surprise that in 2001 when “hatred against the rich” (chou fu xin li) was one of the highest trending terms online in China that the media noticed a rapid increase in the vandalization of luxury cars.

The car culture in China built up luxury cars as synonymous with wealth. With China’s struggling transition for socialism to a more capitalist economy, vandalizing cars were seen as a reaction to the rise of overall wealth in China. As a result, symbolizing wealth with luxury cars became the necessary catalyst for luxury car sales in China. Equating luxury cars with social status elevated the number of cars bought in China as well as the quality of the cars. This culture has only continued to grow and will reach its peak in the coming decade. According to the Mckinsey Report, studies suggest that Chinese consumers are much more likely to purchase high-priced luxury cars in the next upcoming decade than in previous decades.Higher incomes are expected to lead to more sales of cars placed in the 250,000 - 800,000 Ren Mi Bi (RMB) range. Luxury cars companies are beginning to market much more heavily in China as well because of the companies’ realization of the social value placed on premium cars in the country. As more and more cities appear in China, the city life ideals of urban consumers have begun to increase in China as well. Cars have become a symbol in China’s cities in regards to wealth and social status. The country’s cities have a wide range of socioeconomic classes ranging from migrants to business tycoons. As a result, owning a car is an immediate symbol of one’s socioeconomic classes in cities. The luxury cars market has thus become one of the premier avenues for showing off one’s wealth and the market has grown as a result.

Global Significance
The epitome of car culture equates economic and social success with owning cars. Domestically, this concept has forced the uptick in cars throughout the country. However, the social significance has begun to reach outside the bounds of China and into the rest of the world. Bustling city life has become a staple of Western democracies. There has thus become a demand in China for cars to meet the demand of the many western tourists coming to the country each year. Just in May 2020, there were 115 million travelers who came to visit China and they traveled around mostly by car. The car culture now does not just have to meet the social needs of the average consumer but also for the rest of the world. A study done by Science Direct found a direct correlation between social status and cars throughout the world. In a study done about Eastern Europe, it was found that even as state-led socialism has decreased throughout the decades, cars are still considered as the main symbol of social status among adolescents. This was found true even through people who never experienced full state-led socialism. This study draws a direct parallel to China and the average modern Chinese consumers. Throughout the world, social status has been equated with nice cars. In China, this concept is just pushed to the highest extent possible because of the large population and the rise in overall urban life. In a global context, China’s car culture is following what happened throughout Western democracies as well. In America, as China began to industrialize, the car industry boomed. The world has just never seen this car culture created on the scale of China’s ever before. An urbanizing and modernizing economy of China will only place more and more value on cars in the future, creating a dangerous tug of war between economic prosperity and environmental consciousness.

Economic Benefit
China initially placed an emphasis on stimulating a car culture because of the economic opportunity that an international car market could bring to the industrializing country. Before China industrialized, it was hard to envision China as an economic powerhouse. However, the automotive industry was one of the biggest catalysts to China’s market. In 2018, just in car exports, China made a whopping 15.7 billion dollars. Additionally, just from Germany, China imported $24.3 billion worth of cars to sell to their consumers .The economic benefit to China has been growing year over year. From 2005 to 2012 there was a 18.1% year over year growth. This trend is indicative of the overall social value that China places on owning cars. The car industry has shown that it will rise along with the economy. The economy of China has certainly benefited much from the car industry and the symbiotic relationship between the two is good for global business as well.

Jobs
The car culture in China has created lots of economic benefits such as the creation of a whole new sector of jobs. The car industry is responsible for 10% of the total jobs in China .The manufacturing, selling and repairing of cars is one-tenth of the current job market. Additionally, 9.6% of total consumer retail sales in China were from the automotive industry. The volume of cars throughout the entire country has stimulated so many jobs and has become an important aspect of economic growth. Service jobs, manufacturing jobs, and others have sprouted up all across a country where three decades ago the annual output was only about 2 million. In the present day, China basically averaged this production per month. The job growth of this sector has been astronomical and is a reflection of the intense car culture created in the country.

Global Context
China currently dominates not just the Chinese market but also the world market. The value that China has placed on the automotive industry has had residual effects throughout the rest of the world. As of 2017, China had 30% of the global market share by producing roughly 22.5 million passenger vehicles. Because of China's large population, the impacts of their intense car culture have lasting effects on all of Asia and the rest of the world. In China, there are roughly 281 million cars currently on roads. In future years there are projected to be up to 350 million cars. In a global context, this is an almost unfathomable amount. The United States will have roughly the same amount of people in their country as China will have cars in their country. This speaks volumes to the intensity that the Chinese people value cars. 15 of the 25 most congested cities in the world are in and throughout China. It is therefore clear that China is selling an immense amount of cars in comparison to the rest of the world. The car craze in China is one of the main reasons that the country has the manufacturing output that it does and the GDP year over year growth that it does. China’s automobile industry accounts for roughly 10% of the country’s GDP. In comparison, the automotive industry only accounts for roughly 3% of the United States of America’s GDP. This shows the true impact that China places on its car industry. There is an economic fervor for the industry like no other. The desire for the transportation good coupled with the sheer population makes cars an economic workhorse with seemingly endless economic potential. Additionally, this potential is needed as China’s growth has been slowing down. China relies heavily on exports for money and may need to strap as much out of the car industry as possible given its current economic uncertainty in the future. As mentioned in the figure below, China will contribute roughly around 35% of worldwide automotive growth in the 2010s. China will have more cars than all of America and Europe and have higher year over year growth than both of these entities. The fact that China has maintained this growth for this long speaks volumes to the overall societal value placed on the cars.

Environmental Controversies
China’s rise in cars has led to environmental concerns throughout the nation. According to a study done by Xinghua, 31.1% of China’s air pollution has come from vehicle emissions. The transition from bicycles to cars has led to more highways and a rapid increase in car usage. The culture and increased desire to own cars has put the country in a precarious position environmentally. The drive for cars only continues to grow but so do the country’s carbon emissions. As a result, China has made efforts to curb some of the negative effects of its car culture. China has continued to be among the leaders in emissions throughout the entire world. The car boom has put extreme strains on the country for energy and infrastructure. By the end of 2019, China had a whopping 281 million cars throughout the country (8). For comparison, less than 10 years earlier China only had around 90 million cars on the road. In 1986, the country had a measly 2.6 million cars on the road. The industry has grown exponentially and made it extremely hard for the government of China to curtail the environmental problems that come with gas powered cars.

Air Pollution
The Car Culture that has developed throughout China has caused negative environmental impacts mainly in the form of air pollution. Currently, vehicles contribute to roughly 50-80% of CO2 emissions in the country’s cities. Additionally, vehicles contribute around 40% of NOx emissions. With this data, it is determined that vehicles are the leading cause of air pollution in China. With the car culture as crazy as it currently is, irreversible negative effects to China’s air are currently on the rise. Another reason for this rise in air pollution is the lack of infrastructure to keep up with the rise in cars. Cars are rising at roughly 20% per year while roads are only increasing at roughly 3-4% per year. As a result, congestion is only getting worse and worse throughout the country. Traffic is exacerbating the polluting problem. The social desire for cars has made the average Chinese consumer okay with sitting in traffic for hours at a time. The symbolic significance of owning a car is worth the inconvenience. However, this seemingly insignificant inconvenience is contributing to much of the environmental air problems the country is now facing. The rise in air pollution has real negative effects. Respiratory disease is on the rise and the car culture is the main contributor for this problem. According to the World Bank, one-fourth of all deaths in China are due to respiratory disease. The social desire that the average Chinese consumer has to own a car is creating the environmental problems leading to their deaths. It is a tragic cycle that currently dominates the landscape of China.

Even Odd License Plates
China had such trouble controlling the car boom that the country in 2008 instituted a rationing system in Beijing based on one’s license plate number. Roads were restricted by whether your license plate ended in an even or odd number. One day, even licensed plate cars could drive, the next day only odd license plate cars could use the roads. In 2008, the People Daily News had ranked Beijing as the city with the worst pollution in the world and with the Olympics on the way, China instituted this policy in attempt to lower the emissions caused by the millions of cars used everyday in the city. China has also made it harder to get license plates in general as in Shanghai and Beijing, one has to essentially win a lottery to be able to purchase license plates. Similar license plate restrictions have happened throughout the municipalities of Shenzhen and GuangZhou. The restrictions mainly are put in place when the car density exceeds 250 vehicles per kilometer of road. Currently Beijing, Shanghai and Guangzhou have reached this car density and restrictions have followed. However, by the early 2020s it is projected that a whopping 20 more cities throughout China are projected to exceed the 250 cars per kilometer of road measure. This brings questions to the Chinese government on how it will place restrictions as more and more cities throughout the country are in need of vehicle control. Traffic congestion is one of the leading causes of air pollution in the country and without these license plate restrictions, congestion will only get worse and brings emissions to startlingly high and possibly irreversible levels. These tactics are some of the many ways the government is trying to slow down the car culture craze in China.

Removing Cars
In 2015, the government announced that it was scraping up to 6 million cars that did not meet the country’s environmental standards.The announcement was made because China realized that it could not meet the environmental goals the country set for itself with the current pace of cars being put on the road. By 2035, China hopes to have only EV and hybrid cars on their roadways. The elimination of gas-powered cars has become a popular mechanism used by the Chinese communist party as a means to mitigate the environmental impacts of its car culture. The ministry of China has stated that currently 7.8% of cars on the road do not meet the environmental safety standards set by the country. Therefore, getting these cars off the road is an imperative step for the government to start to decrease emissions.

EV Car Culture
Taking environmentalism to heart, China has become the largest owner of electric vehicles in the world and has made a commitment to create a culture around clean air vehicles. In 2018, over one million electric vehicles were sold in China tripling the sales in America (9). In response to an increased pollution and emissions, the government of China has made a conscious effort to create a culture around driving cars. China has attempted to shift the desire from gas powered cars to electric vehicles. Elevating environmental consciousness to a symbol of a respectful social status is a way to flip the current car culture in China on its head. If Electric Vehicles become the new symbol and the new forefront of the economy, the same push for gas powered cars in the 90s and 2000s could happen for electric cars in the coming decades. The Chinese government has realized that the country is past the point of no return with eliminating enough cars on the road. Therefore, shifting the car culture to a more environmentally friendly form of transportation becomes the main necessity for the country moving forwards.

EV Car Policies
The Chinese government has instituted certain policies to change the car culture of China. China has set a goal of having EVs make up 40% of the car market by 2030. The government hopes to change the way cars are used in China. A predominately EV market would prevent a lot of the environmental consequences that the current car culture brings. China has instituted a zero emission vehicles mandate. Starting in 2020, each vehicle manufacturer must import at least 12% electric vehicles. Additionally, starting in May 2016, within the next 5 years half of new vehicles purchased must be Electric Vehicles. The government is making a big conscious effort to change the car culture from gas powered to hybrid and EV cars. These policies are meant to make the conscious change institutionally away from gas powered cars. The government officially banned the production of gas-powered vehicles cars by 2035. All cars must be eco-friendly. 50% of the cars must be EV with the other 50% being hybrid gas/electric cars. China has realized that the car aspect of car culture is here to stay so the government is attempting to change the culture to more eco-friendly practices.

Incentives
China, beginning in 2009, created incentives for purchasing Electric Vehicles. The government committed subsidiaries of up to 60,000 yuan for people who took the step to purchase electric cars Recently, EV vehicle incentives for cars with a minimum range of 400km have hovered around 44,000 to 50,000 yuan .The government is making a real effort to curb their environmental issues by offering monetary and credit incentives. These incentives are necessary because of how entrenched the current car culture is in China. The last 30 years have been dominated by a domestic desire for luxury gas powered cars. Therefore, to shift the culture to a domestic desire for Electric Vehicles is going to be an uphill battle for the government. The social status elevation that a luxury, expensive vehicle brings to the average person in China makes it extremely difficult for the government to convince these people that switching to an electric car will not lower their social status. New companies such as NIO and Tesla have entered the China market in an attempt to appeal to this higher luxury consumer demand. China is hoping that sleek electric cars will be part of the solution to the environmental problems cars currently have been bringing to China.

Subsidies
The Chinese government is instituting subsidies to different manufacturers throughout China in order to incentivize these companies to create more environmentally friendly vehicles. The subsidies are based on the range of the cars as well as the type of cars. Most of these subsidies were cut down in 2019 but still were pivotal for the jumpstart of EV manufacturing in China.


 * Plug-ins with a range of over 400 kilometers received subsidies of 25,000 RMB
 * Plug-ins with a range of 250-400 kilometers received subsidies of roughly 18,000 RMB
 * Plug -in hybrid cars received subsidies of roughly 10,000 RMB.

Tax exemptions
Tax exemptions are also another form of subsidies that the government has used to incentivize a shift towards EV car culture. Manufacturers are able to save thousands of RMB in tax exemptions from producing electric cars and are able to see their taxes as a whole cut by up to 50%. The hope is that these tax exemptions are enough to slow down the gas-powered car production in the country.

Electric Buses
One of the main problems with the sheer number of people who reside in the country of China is figuring out how to create adequate transportation for them. China is the second largest country in the world in terms of size and is in constant need of reliable transportation. Since the introduction of car culture in China, the demand has skyrocketed as cars have become the clear best way to travel across the country. However, the car culture has neglected the development of other forms of transportation that can be of just as good utility as the gas powered cars. The development of electric buses has become a product of the need to change China’s car culture. In recent years, China has made a conscious effort to dominate the electric bus market. China currently owns 99% of electric buses in the world and continues to try to push this form of transportation onto its people. As a result of its efforts, China’s public transportation fuel usage has gone down a whopping 95%. This has allowed China to drastically reduce its carbon emissions per bus. The government’s commitment to buses has also impeded the sales of China’s gas powered car market. Over the last three years, China’s car market has gone up an average of 8.5% (while reducing in number year over year), while in the last five years, China’s electric vehicle sales have gone up by over 1000%. China's commitment to electric buses is a big reason why this change has begun. If China is to turn its CO2 emissions around, changing the car culture and shifting it towards public electric transportation is a crucial step in this process. In between 2013 and 2017, an astounding 8.56 million tons of CO2 were reduced because of the increase in electric buses. The CCP hopes to make this the new trend. Providing this positive relationship between increasing EV buses and lowering emissions can be the start of the turnaround of the negative environmental consequences of the car culture in China.

Bikes/ Low energy vehicles
Traffic and congestion on roads have become a big problem of China’s car culture. The roads and infrastructure in China were not built to handle these many cars on the roads, especially in big cities. As a result, scooters and other low speed vehicles are a popular way to get around the city and alleviate the traffic. Traffic congestion is one of the leading forms of unnecessary car waste that is produced by China’s car culture. Over the past few years, the government has worked to put more people on low-speed vehicles and for these vehicles to be mostly electric. In 2018, over 700,000 Low Speed Electric Vehicles (LSEV) were sold in China. There are more and more LSEVs on the road each day. Especially for short distances, changing the culture in China of hopping into a car and instead hopping onto an LSEV will be a crucial step for lowering the overall traffic congestion in China and the negative environmental consequences that come along with it. By 2020, there are expected to be roughly 30 million Electric Bikes and LSEVs on the roads, a year on year growth of over 6%. The commitment to growth is in China and it is a hope of the government that more people latch on to the ideas of LSEVs and away from traditional cars.

Pushback
While the Chinese government has made a commitment to institute more policies towards electric vehicles and other forms of transportation besides gas powered cars, China is still by far the biggest market for traditional cars in the world. As a result, there is lots of pushback from the most successful car companies in China about these new approaches. The companies that benefited the most from the car boom in China are now seeing their profits shrink and shrink. For example, Ford’s car sales in China have plunged 37% in the last year, due to COVID-19 and the shift away from gas powered cars. In 2016, Ford sold nearly 1.3 million cars while this year the company sold just over 700,000. As a result, the company has voiced its displeasure with China’s cap on cars on the road and overall shifts to more environmental forms of transportation. Fu yu, an entrepreneur in Beijing, noted how China’s shift to other forms of transportation has made Ford to “start looking middle-aged”. These car companies that once could count on the average Chinese consumer to demand their cars are now being pushed out of the market. Chinese brands currently own around 42% of the market share in China. Foreign brands still take up the majority with 58% but more and more are being pushed out such as Ford.

However, by no means have gas-powered cars fallen off their pedestal in China. As the company continues to get richer, the overall demand for luxury cars is still very high. Companies like Volkswagen, which sold over 3 million cars in 2016, are still mainstays in China. Car companies sold 20.7 million passenger cars in 2019 with the majority of these sales coming from gas-powered cars. Additionally, there has been push for more license-plates to be allowed in some of the densely car populated cities.Therefore, despite conscious efforts by the government, the local municipalities of Shenzhen and Guangzhou have upped their quota of license plates. Essentially, there is still a lottery system but there are now more winning lottery tickets. The car culture in China is still heavily entrenched and is here to stay for modern China.

COVID-19
The car culture in China was responsible for the meteoric rise in car sales. However, COVID-19 was the first thing that halted the overall sales in the country. As China locked down, it stalled this seemingly endless growth of cars within the country. Overall, in 2020 car sales went down 6.8%. This is the largest decline in the automobile industry in the past forty years. Sensibly, the lockdowns forced car sales to completely shutdown. There were a total of 20.7 million passenger cars sold in 2019. In 2020, the sales dipped down into the lower 19 million cars. This type of downtick happened throughout the rest of the world but it was the first real halt to China’s automotive growth. The Electric Vehicle market took a big hit as well. The EV auto sales in February of 2020 were down 79% in comparison to the same month the year before. This provided a tough gut punch to the electric vehicle industry as production was forced to halt due to the lockdowns. For example, NIO, an up and coming EV car brand has to cut 2,000 jobs as a result of the losses it had to now incur. The virus brought a lot of uncertainty to an industry that was on an immensely fast rise for this past decade.

Recovery
In 2021, car sales recovered to the pre-pandemic levels. There was immense growth in the first quarter of the year. Passenger vehicles bounced back in the first quarter with 69% growth and a total of 5.09 million vehicles sold. In 2018, the first quarter yielded sales of 5.67 million cars. Car sales are thus still down in comparison to previous years but the growth overall is back. The Car Culture has shown its ability to persevere through the pandemic and reach the same fervor that it has at pre-pandemic levels. The social value placed on cars did not diminish throughout the pandemic and still came back just as strong as before. The recovery is projected to continue and reach similar levels to 2019 car sales.