Judges Made Unwitting Accessories In Beijing License Plate Scam

by Bertel Schmitt

Published: February 17th, 2011

judges made unwitting accessories in beijing license plate scam

Beijing’s draconian license plate limits have a stimulating effect on the creativity of Beijingers. To skirt the new rules, complex schemes are being devised. Beijing’s courts are turned into accessories of the fraud. According to China Daily, the scheme goes like this:

The seller and buyer of a used car invent a debt the vehicle’s seller supposedly “owes” the buyer for which the car is “collateral”. Both go to court. The court orders the “debtor” (the car’s seller) to hand over the car to the “lender” (the car’s buyer). Along with the transfer of the car’s ownership comes the already registered license plate. Bingo.

Under the new rulings, registered owners of a car can buy a new one without being submitted to the license plate limitations. However, the plate does not transfer with the used car. As a result, Beijing’s second had car market pretty much collapsed in January. In the tough rules is an exception for the registration of cars’ ownership transfers through court adjudications, or property transfers related to marriages and inheritances. False marriages with car owners will probably rise also. Adoption and subsequent death might prove as too complicated.

“Such stipulations provide loopholes for used car buyers to avoid legitimate channels,” said Zhu Xingdong, a senior staff member of the people’s court of Beijing’s Huairou district. He said it’s tough for the courts to determine that the debts are legit, because the two parties have colluded in supplying watertight debt and reimbursement agreements. “If it is found to enable people to get around the lottery to obtain license plates, there will be a surge in these cases,” Zhu predicted.

#Beijing #BertelSchmitt #CarRestrictions #China #Scam

Bertel Schmitt

Bertel Schmitt comes back to journalism after taking a 35 year break in advertising and marketing. He ran and owned advertising agencies in Duesseldorf, Germany, and New York City. Volkswagen A.G. was Bertel's most important corporate account. Schmitt's advertising and marketing career touched many corners of the industry with a special focus on automotive products and services. Since 2004, he lives in Japan and China with his wife <a href="http://www.tomokoandbertel.com"> Tomoko </a>. Bertel Schmitt is a founding board member of the <a href="http://www.offshoresuperseries.com"> Offshore Super Series </a>, an American offshore powerboat racing organization. He is co-owner of the racing team Typhoon.

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Wallstreet on Feb 17, 2011

Does Chinese Government ever heard of "laissez-faire"?

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- M 1 on Feb 17, 2011
  
  Sure they have. Then it was rounded up and now spends its days busting granite in the Tarim Basin with the other ideologically misguided dissidents.
  
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- Charly on Feb 17, 2011
  
  Yes, but Somali isn't exactly something you want to copy.
  
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Wsn on Feb 17, 2011

Well, loop holes are unavoidable, when the policy makers deliberately create loop holes for themselves (i.e. "registered owners of a car can buy a new one without being submitted to the license plate limitations") The best loop hole free way to control the number of cars is: gas tax. Increase it only by 1 cent RMB per day, until there is no congestion.

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- Charly on Feb 17, 2011
  
  Gas tax doesn't make ownership of a car expensive, only the movement of a car so it simply doesn't help much with congestion as that happens when car travel is the most "usefull"
  
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