By on March 13, 2013


I am coming back to China after having been away for months. My trusted sidekick of many years, a lady surnamed Zhang, seeks my advice. “Bertel, we have car problems.” Uh-oh, I think, and I mentally do a review of my accounts. This smells expensive. As it turns out, the problem is bigger than what money can solve.

Ms. Zhang explains that her mother won the lottery. The Beijing license plate lottery.
“Now my mum needs to buy a car real soon, otherwise the win is forfeited.”

Ok, so buy a car, I say.

“But we already have two, and my mother does not enjoy driving.”

Ms. Zhang the elder could not resist entering the lottery though.

As the world knows, Beijing has enacted a lottery system to curb the number of cars on Beijing’s roads. That system seems to have the opposite effect.

Get rid of the oldest car and buy a new one, I suggest.

“That doesn’t solve the problem. I can keep the license plate of the old one when I sell it. We now have three plates. What shall I do?”

How about someone in the family, I suggest. Chinese are big on family.

“They don’t want it, they all have a car. Some have two.”

Ms. Zhang then relates to me the story of a lucky member of the extended family who came into two more license plates than he needs. “He bought two extra cars just to keep the plates. The cars sit in his garage.”

How about simply forgetting the whole thing? She already has two cars, does not want three, to hell with the extra license plate.

“But that plate is very valuable. Very hard to get.” Ms. Zhang is deeply conflicted.

If it’s so valuable, then sell the plate, I say. This is China, everything has its price.

“Cannot. Plate not transferrable,” says Ms Zhang. And there is an even bigger problem:

“After winning the lottery, if you don’t buy a car, you may never ever enter the lottery again.”

For the first time, I am out of good advice. I muse that when I came to China first in 2004, people were poor, nobody had a car, the highways were empty, and now, not even 10 years later …

Maybe that’s the solution to revive flagging car sales in Europe, and to bring America back to the 17 million heydays: Limit the cars people can have. Then, everybody will want three.

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23 Comments on “Curbing Cars, The Chinese Way – A Solution To Flagging Sales?...”

  • avatar

    Kind of like Halloween. When I open the door, and the candy bowl is full – the kids are polite and only take one apiece.

    Once the candy bowl nears the bottom third, perceived scarcity of resources blah blah blah.

    • 0 avatar
      Compaq Deskpro

      When I was a kid I did the opposite. If the bowl was full I’d take a handful, if the bowl was low I’d take one so everybody could get some. Maybe I’m a communist.

      • 0 avatar

        No, you are a civil person.

        A communist makes a rule backed by force to regulate the distribution of the candy. For instance, you could have a lottery for who gets candy. Of course, those favored by those in power would get plenty of the best candy, and THEN, the rest of the candy would go to lottery winners. This would cause people to want the candy even more. Next thing you know, it’s not just kids entering the lottery, but grand mothers…

  • avatar

    We have six…..

    Back when I lived in a section of Virginia called Hampton Roads (an awful place, altogether, by the way) we had traffic problems, of course. One of the local representatives in the state congress, whose main district covered food stamp land (is that offensive? Too bad) had a great idea to the solution;

    Limit the number of cars a household can have. He touted this on the local news, a great idea, and no doubt a transparent way to punish those evil wealthy families and their multiple car ownership ways.

    Once again, we have 6 cars. There’s me, and her, that’s it. There can only be a total of 2 of those 6 cars on the road, causing traffic, at any one time. Hell, two of the cars have been locked away and haven’t moved since early-fall.

    Idiot politicians. Of course, his idea never went anywhere, because anybody else outside of food stamp land paid him no attention, but IIRC, he is still employed today. What’s going on in China is of the same mindset; why have a lottery? Until cars can drive themselves, without a person inside, cars don’t create traffic; people do (kind of like the whole gun and killing people thing, right? Amazing!)

  • avatar

    I want to make sure I have this straight.

    There is a much sought-after commodity, available only through a lottery. A person already has this commodity, in abundance, and does not even fully appreciate or use it, and she entered the lottery again? And now this person has such an abundance of this rare commodity that it is causing problems?

    Is this a cultural thing? Is it because I’m American that this seems more like a behavioral problem than anything else?

    • 0 avatar
      Freddy M

      Thank God I’m not the only one.

      My mind was well and truly Shanghai’d after that article.

    • 0 avatar

      Idk i guess it’s kind of like playing any lottery — people just want to win at something. I guess this lady is going to have to buy a car — just get a cheap crappy one to keep the place, i suppose

    • 0 avatar

      It is a cultural thing.

      Chinese love to gamble, so apparently they will gamble even when they don’t want to win the prize!

      Thus, the real problem: If she doesn’t take the car, she can’t enter the lottery again!


    • 0 avatar

      And this is how communism learns the lessons of supply and demand. When the perceived supply is much smaller than the perceived demand, the actual demand increases because the (perceived) value of the item is greatly inflated. Here we have what appears to be a license plate for everyone who NEEDS one, but because the government says you can’t have one unless you have that golden ticket, people WANT all they can get, even if it means buying a car they will never drive just to get the license plate.

      If the government is convinced a lottery system is the way to go to gradually introduce new cars into the system, then the mistake was that they allowed an individual to have more than one to start with. You enter the lottery, you win, you get one plate, and you are done with the lottery until everyone who wants one gets one. Then you can enter the lottery again. Even in this scenario those who don’t really need one will enter to get one, but at least they won’t be warehousing cars to keep getting as many as they can. Or maybe this whole system is a scheme to increase car sales in China. Who knows..

  • avatar

    Sounds like the Chinese words for “valuable” and “hard to get” are too similar to each other. Just because something is hard to get, that doesn’t make it valuable. Like old Saab parts. Or polio.

  • avatar

    Bertel just described china’s “first-world” problems.

    funny thing is, meanwhile in the land of the walmart shopper,
    there is an abundance of “3rd world” problems…

    more pics @

    • 0 avatar
      Athos Nobile

      Clever, but still not 3rd world nasty enough.

      Google “Solo en Venezuela”, click the site browse a couple of pics and then compare. You’ll discover a whole new meaning to the term “not roadworthy”.×308.jpg

  • avatar

    She should not have entered. There is supposedly a trick of the mind, losses are way overvalued. The behavioral economics guys tested for this effect. So the value of the plates is being seen as even greater than the cost to obtain plates in the case that they were to become wanted at a later date. A wealthy person is very likely to buy another car to keep them because the hassle to get plates is seen as a bigger negative than the cost of an extra car.

    Get them to sit down and do math. The likelihood they need the plates, the cost of another car, etc.

    It would be interesting to test how many extra cars are being kept, and the real effects. Likely, many family members are driving that otherwise would not. Also, the future effects of slightly used cars on the market might be interesting.

  • avatar
    George B

    If it’s so valuable, then sell the plate, I say. This is China, everything has its price.

    “Cannot. Plate not transferrable,” says Ms Zhang.

    If the license plate is not transferable, how did the other license plates get transferred to relatives? Could she transfer use of the license plate to an employee instead? Maybe she can find a young man who gains status and access to hot young women by driving a car, letting him use a car and license plate in exchange for money and/or labor and “running errands”.

  • avatar

    Do prisoners stamp out their plates also? Just wondering…

    • 0 avatar

      Probably not. License plate manufacturing is likely a lucrative part of the bureaucracy. Also, there have to be model prisoners who can be trusted to handle dangerous machinery and sharp tools. Like the prisoner in Massachusetts who wrote on the tissue separating a pair of plates, “Help! I’m being held against my will!”.

  • avatar

    Are you required to buy a NEW car when you win the plate lottery? If not, I say get a beater.

    Of course, even looking at a beater may be frowned upon there by your nouveau-riche circle of friends.

  • avatar

    Sounds like the lottery is working as designed. It keeps the number of cars on the road down as one person is winning all the plates and can only drive one at a time.

    • 0 avatar

      Are you saying the lottery is fixed? That little old ladies tend to win more plates than they can ever use? There have been rumors of corruption in Chinese governance, but it couldn’t have gotten that far!

  • avatar

    I wonder if there is some way for them to rent the plate out? I can imagine that would be a VERY lucrative market.

  • avatar

    Maybe she could buy a car and then rent it to someone who needs a car but didn’t ‘win the lottery’.

  • avatar
    doctor olds

    Interesting insight into China and the “law” of unintended consequences.

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