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China’s auto boom

Marketplace Staff Aug 24, 2011

China’s auto boom

Marketplace Staff Aug 24, 2011

Bob Moon: There are now over a billion cars and trucks on the planet. That, from a report by auto industry researcher Ward’s. Thirty-five million vehicles were sold last year — nearly half of them in China. That country recently overtook the U.S. as the world’s biggest car-buying market.

For more on this, we’ve reached out to Peter Hessler. He’s a staff writer and former China correspondent for The New Yorker magazine, and author of Country Driving: A Journey Through China from Farm to Factory. He’s back from a recent visit there. Peter Hessler, good to talk to you.

Peter Hessler: Hi, thanks for calling.

Moon: It was about a decade ago you took your big drive across China and you painted a pretty quaint picture at the time: farmers in rural areas tossing their chaff into their road, so vehicles would run over it because, as you wrote, “threshing is the easiest when somebody else’s tires do the work.” That doesn’t exactly sound like a network of highways ready for this sudden auto boom.

Hessler: Yeah, it was very mixed at that time. I got my license in 2001 and they didn’t really have the automobiles yet, but they were preparing. So there were huge numbers of roads under construction. But often you had these new highways to yourself, and it was really sort of an amazing experience to be on these empty roads and to realize why they’re building this, because they expect the market to boom. And that’s certainly what happened; in 2000, the number of cars and trucks sold in China was about one-tenth of what was sold in the U.S. And last year, the sales in China were more than 50 percent higher than the U.S. So it’s just unbelievable, this change.

Moon: And not so much emphasis on functionality; green cars, electric vehicles, hybrids — they’re selling quite poorly in China. In fact, Toyota, I read, managed to sell only one Prius in China last year? Why do you think that is?

Hessler: Well they’re too expensive. China has a huge market in low-cost automobiles; this is the big part of their exports. They export to a lot of developing countries. And so, you know, even though they are working on green technology and electric cars and so on, the domestic market is really important to them.

Moon: I’d hate to think of the impact on the planet, though. What could the Chinese government do to boost demand for those green cars rather than all those SUVs?

Hessler: Well, I’m not even sure if that would be a great idea right now, because to be honest, I mean, they boost the green cars and then you have more electricity use. And where is the electricity coming from? In China, it’s overwhelmingly dominated by coal. And after that, you have a lot of hydropower, which is not a great thing. I live in the Three Gorges region, and so, two million people were relocated, entire cities that I remember are now gone. So you realize this is a staggering challenge. So it is a place where they’re trying a lot of new things, but the scale is massive.

Moon: Massive? Ward’s Automotive says there’s now one car for every 17 people in China, compared to almost a one-to-one ratio here in the U.S. What do you think that place would look like if China were to catch up with the U.S.?

Hessler: I think it would never happen. I think people in the States tend to be very frightened about this change in China, but we need to remember that we continue to lead the world in the unhealthy use of the automobile. And you know, the living in the suburbs, driving everyday to and from work, driving everywhere to drop your kids at practice or whatever — that’s not what the Chinese are using their cars for. It’s also important to remember, when I took that first drive in 2001, gas price was about $1.20 a gallon — now it’s about $5 in China. And that does sort of limit people from using vehicles the same way we do. And of course, the simple issue of traffic and congestion also limits them.

Moon: Peter Hessler, before you go, let me see how much you remember about your Chinese driving test: If another motorist stops you to ask directions, you should A) not tell him; B) reply patiently and accurately; or C) tell him the wrong way?

Hessler: Yeah, that’s all of the above.

Moon: Peter Hessler, he’s a staff writer for The New Yorker. Peter, thanks for talking to us.

Hessler: Thank you.

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