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2 China's auto industry cleans up its
act By Daniel Allen
BEIJING - China, once noted as country of
cyclists, is now coming to terms with the horrors
of a making a wholesale switch to motorized power.
In the space of little more than a decade it has
become the world's third-largest car manufacturer,
and cars have become the biggest carbon monoxide
and nitrous oxide emitters in its main cities of
Beijing, Shanghai and Guangzhou.
Vehicles
produce up to 79% of air pollution in some urban
centers, the State Environmental Protection
Administration recently estimated, contributing to
the deaths of 50,000 newborn
babies and 400,000 cases of
respiratory illness every year in China's 14
largest cities.
Beijing is being forced to
weigh up new environmental policies against the
long-term development of an economically vital
auto industry. Vehicle sales rose 25% in the first
eight months of this
year, and are expected to hit
nine million for the whole of 2007, up from 7.22
million in 2006.
"China's vehicle output
is expected to grow an average of 10-15% annually
over the next 20 years," says Zhang Xiaoyu,
chairman of the China Association of Automobile
Manufacturers. That will help give the country 131
million cars by 2020. The growing automobile
society also threatens to overwhelm the country's
limited oil resources.
"Every year, China
allocates 60% of its oil supply to
transportation," says Deng Nan, vice minister of
Science and Technology.
Adding to a sense
of urgency in the government is the prospect of
the world's leading athletes - and thousands of
spectators - struggling to breathe in Beijing's
polluted air when the Olympic Summer Games are
held in the capital next August. In a worrying
report in the China Daily recently, Shi Hanmin,
director of the Beijing Environmental Protection
Bureau, commented, "Beijing's air quality is still
not within the requirements of the green Olympic
Games. The city still has 300,000 highly polluting
vehicles, each one with emissions equal to the
exhaust produced by 14 cars that meet current
European Union emission standards."
The
United Nations Environment Program recently
released a report commending Beijing for its work
in cleaning up the environment in preparation for
next year's Games, but noted that air quality
remained a "stubborn" problem, as "levels of small
particles in Beijing's atmosphere, which are
hazardous to health, often greatly exceed World
Health Organization Air Quality Guidelines".
The International Olympic Committee is
currently studying recent air quality tests to
assess the risks posed by pollution for athletes.
Strategic short cut Drastic
times call for drastic measures. In the latest
sign of China's manufacturing ambitions and desire
to go greener, a major Chinese company has teamed
up with the government to purchase a high-tech car
engine plant in Brazil from auto giants
DaimlerChrysler and BMW. To date, China's failure
to develop its own advanced engines has been the
biggest technical obstacle facing its automakers
as they attempt to modernize and enter the global
export market.
Because the plant is so
sophisticated, it is far more cost effective for
the Chinese automaker, Lifan Group, to disassemble
the plant, ship it the more than 13,000 kilometers
from Brazil, and reassemble the parts in southwest
China's Chongqing municipality, rather than
develop its own technology. If operations start as
scheduled in 2008, China will have leapfrogged
competitors such as South Korea to catch up with
Japan, Germany and the United States in producing
and selling some of the most fuel-efficient cars
on the market, such as the Honda Civic and Toyota
Corolla.
Buying overseas technology will
put China's auto industry in a solid position to
produce large cars that can get more than 30 miles
to the gallon. The US$500 million engine plant was
built in southern Brazil in the late 1990s by a
50-50 Chrysler/BMW joint venture and combines the
latest American and German technology to produce
the 1.6-liter, 16-valve Tritec engine.
Lifan founder and chief executive Yin
Mingshan expects eventually to export to the EU
and US markets. Recently quoted in the New York
Times, Yin said, "Chairman Mao [Zedong] taught us
that if you can win, fight the war. If you cannot
win, run away. I want to train my army in these
smaller markets, and when we are ready, we will
move on to bigger markets."
Yin faces
stiff competition on the home front. In 2006,
Dongfeng Honda Automobile Co, a joint venture
between Honda and China's Dongfeng Motor Group,
completed a 2.8 billion yuan expansion of its
factory in Wuhan, Hubei province. Annual
production capacity was quadrupled from 30,000 to
120,000 units.
The plant will operate
under the "Green Factory" principal, with
consideration given to both the internal and
external environments, including a water-based
paint system that will limit the emission of
hazardous substances, promote purification and
recycling of wastewater, and improve manufacturing
efficiency.
Efficient
Expectations China has in place some of the
world's strictest fuel-efficiency requirements.
Energy efficient transportation is a key part of
the country's 11th Five-Year Program (2006 -
2010), and a large part of the overall goal is
making government logistical operations, mass
transit systems and even Chinese families into
energy efficient.
The market is evolving
and evolving fast, according to He Dongquan, an
authority on transportation with the Energy
Foundation in Beijing. "There's controversy about
'Green GDP' and how China should grow ... China is
in a transitional period where everyone's mind is
changing," he said.
The government has
already invested more than 1 billion yuan (US$120
million) into "green vehicle" research, with 22
technical standards established for the production
of electric passenger cars. More than 200,000
alternative fuel vehicles are on China's roads
already, and more are on the way.
In
January 2007, the government announced that it was
working out measures to give tax breaks to
energy-saving and environmentally friendly cars.
Ownership of vehicles that meet current energy and
emissions standards will be encouraged, and a more
detailed "green car" index will be introduced.
Punitive taxes will be imposed on cars that fail
to meet fuel consumption standards.
Hybrids hit the market Perhaps
the most promising development with regard to
cleaning
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year, and are expected to hit
nine million for the whole of 2007, up from 7.22
million in 2006. 
