New car plate restrictions fuel Beijing black market

Mon Feb 3, 2014 4:49pm EST
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By Samuel Shen and Kazunori Takada

SHANGHAI (Reuters) - Beijing's clampdown on new car registrations is creating a scramble for license plates and fuelling a boom on the black market where prices have hit as high as $33,000, almost double the price of China's best-selling car, the Ford Focus.

Keen to curb pollution and traffic jams, China's capital city instituted a lottery in 2011, where it initially awarded plates to one in 10 people hoping to get a car. This year, Beijing will cut the allocation of new number plates by 40 percent to 150,000, meaning only one in 150 will get a plate.

The long odds have created a thriving black market, even though it is illegal to buy, sell or rent a number plate. Those eager to own a car say they are willing to take the risk.

"I participated in every lottery over the past two years but have never won. I'm desperate," said Han Kuilong, an office worker who last month rented a car plate for 5,000 yuan ($830) a year.

"I live on the outskirts but work in downtown. Life is very inconvenient without a car," Han said.

The Beijing government's traffic management bureau confirmed that trading in car plates was illegal, but did not immediately respond to requests for more details.

Lawyers say the government can fine people involved in car plate transactions and revoke their licenses, but the practice is so widespread it is impossible to police.

"Such deals are unlawful," said Yang Lisha, a Beijing-based lawyer. "But many people are in this market, so the cost of enforcement is very high."   Continued...

A Porsche is parked at a parking lot of a shopping mall in the rain in Beijing June 5, 2013. REUTERS/Kim Kyung-Hoon