China plans to ban government officials buying foreign cars

[beijingwalker]

China plans to ban government officials buying foreign cars
7 March 2012 Last updated at 18:30 GMT
By John Sudworth

BBC News, Shanghai

Foreign car adverts are common in China, but soon public officials may be banned from buying them

US carmakers see boost from China China 'to withdraw' car support China to tax US-made car imports China may be about to issue an order that will have bureaucrats up and down the country quaking in their boots, or at least their luxury leather seats.

A public consultation ends on Friday on a proposal to stop officials spending taxpayers' money on foreign-branded cars, forcing them to buy Chinese models instead.

From the cars parked outside the Great Hall of the People you'd be forgiven for thinking there was a gathering of German rather than Chinese politicians in Beijing this week.

Row after row of gleaming black Audis, and they are mostly Audis, but also Mercedes and BMWs, being polished by their drivers while their bosses get down to political business inside.

But it is not just Beijing.

Go to any Chinese city, or even provincial town for that matter, and it seems rare is the bureaucrat who does not possess a foreign-branded car.

But that could all be about to change.

Protectionism

For the first time a draft list of cars that officials can buy with public funds includes no foreign brands at all.

Taken at face value the move is all about China protecting its own and it could prove very popular.

"It will help our national industry if officials buy only Chinese cars," one woman I stopped in a Shanghai street told me when I asked her what she thought of the proposal.

"Chinese cars are cheaper and officials should drive cheap cars," another man added.

Public procurement of official cars, across all levels of government, costs the Chinese taxpayer well over $10bn (£6.35bn) a year.

By some estimates more than three-quarters of that money is spent on foreign brands.

So as well as a blunt measure of protectionism, banning foreign brands from official fleets might also go some way to easing public anger about government waste, excess and corruption.

'It's the culture'

The past 10 years has seen the rise and rise of the speeding Chinese official busting red lights and scattering pedestrians in their wake.

It is a very public way of rubbing people's noses into China's widening wealth and privilege gap.

The public consultation ends on Friday. However if the new rule is eventually approved many people believe it will be widely flouted.

"It's the culture and we can do nothing about it," says Prof Yu Hai from Fu Dan University's School of Social Development and Public Policy.

"Officials need to keep upgrading. A car with a famous name is a symbol to show your status."

Sending a signal

As for the foreign carmakers themselves, well, they say they won't suffer too much.

Although $10bn of government spending is not to be sniffed at, it is far, far exceeded by the budgets of private individuals and private companies for car purchases in China.

Some estimates put government spending at less than 5% of the total car market.

But however hard to enforce and however limited the impact, a ban on official purchases of foreign cars would still send an important signal.

This is, after all, a time of economic uncertainty and simmering social tension.

In terms of public patience at least, China's luxury loving bureaucrats may be running out of road.

 

[sweetgrape]

The action should have done this many 30 years ago, better late than never. Now, foreign brand take up about 70% saloon car market, and most of government car is foreign brand. all these means the failure of market-technology exchange!!!
If the new policy can be carried out well, the home-grown brand will be benefited from it, of course compared with the huge private market, it is small, but at least, government procurement will enhance brand image.
and the policy also will save much money, Hope the policy can be carried out well!!!

 

[Shardul.....the lion]

A sort of protectionist environment to support inferior local car industry from global onslaught.

But its good, Every country has right to protect its own industry.

 

[Raphael]

^well that's kinda the point. it's inferior now because it wasn't protected from countries that had a head start in the industry.

competition is a good thing though, and as soon as chinese companies gain a foothold which allows them to compete, the market should be gradually loosened so the controlled foreign competition hones the chinese industry even further. market darwinism.