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.
It’s good to see that the Law of Unintended Consequences must be obeyed in all legal and political systems.
Does Chinese Government ever heard of “laissez-faire”?
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.
Yes, but Somali isn’t exactly something you want to copy.
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.
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”