China is now the world's biggest market for new cars. Its motorway network will soon rival America's. But while the rich splash out on Porsches and Ferraris, resentment is growing among the have-nots
It is half a century since Zhang Jing's father impressed the neighbours with a mark of his family's rising fortunes. He was the first in the village to acquire a bicycle; like Ford's Model T, the Forever came in any colour you liked, as long as it was black. Though America was deep in the golden age of the automobile, those days lay so far ahead for China that small boys would loiter on street corners in Beijing, waiting until a car drove by and the exotic tang of petrol fumes filled their nostrils. Even by the early 1980s, glimpses of imported Soviet Ladas or stately Chinese Red Flag saloons were rare outside the capital.
"We never dreamed we would have a chance to have our own car… and not only one," Zhang's husband, Wang Junfang, says.
China's love affair with cars began late, but it has more than made up for the delay. In 2000 there were 4m cars for the 1.3bn population and experts predicted that the number would be six times higher by the end of the decade. Instead, it soared 20-fold. Two years ago, the country became the world's largest new car market. This year, it should see about 18m sales, against 14.5m in the US. The kingdom of bicycles is now the land of the car.
Michael Dunne, whose firm Dunne & Company advises on investments in the Asian automobile industry, calls it car culture with Chinese characteristics. People are looking for freedom and convenience, but "it's different from the US experience – open highways, rolling down your windows, putting music on," he says. "In China, it's more about social status: look at me, look at my new car. It's much more about the thrill you get from pulling up in front of your hotel or golf club or workplace and being seen and recognised."
Zhang and her husband – a fresh-faced, sporty couple in their early 30s – have already added a Peugot 206 to their 4x4 Subaru Forester. "Families want different cars for different uses," she explains. "One for daily use, one for weekends." The bigger Subaru is ideal for getting out of the city so that Wang can fish or the pair can ride their bikes together, they say. The Peugeot is fine, too, and only a few years old. But they like the idea of getting something newer and hipper, so they have come to a Mini showroom. The Mini "looks very cool and quite British, and this brand has been bought by BMW, so we trust its quality," Wang says. "And, of course, we like the personalisation aspect. We want to add stripes after we buy it, and colourful paintwork."
They have plenty of choice as they stroll through the vast new Mini emporium in west Beijing. The store spans 9,000 square metres across two floors, with espresso points and a miniature Zen garden. There's a pool table beneath the scrawled command BE SEXY – BE MINI and giant copies of Andy Warhol's Marilyn and Mao portraits lean against a wall. Around the floor, potential buyers settle into the seats of Coopers and Countrymen, while returning owners ponder new ways to distinguish their cars. One motorist shows off the chequerboard roof, racing stripes and new wing-mirror covers that he's added; he is disappointed that there is, as yet, no checked glove compartment cover for his model.
At 220,000 to 400,000 yuan – £22,000 to £40,000 – the cars are a hefty investment in a city where last year the average income was about 33,000 yuan. Wang and Zhang are teachers, but still live with his parents and have had a little help from relatives. Being a two-car couple seems natural to them.
In fact, the Mini showroom looks restrained in a land that boasts almost a million dollar-millionaires. Gleaming Lamborghinis, Tramontanas and Porsches park in front of malls or screech along expressways in late-night races, prompting admiration, envy and resentment, but little surprise these days. Sky-high taxes on high-end imports have proved little deterrent; the Maserati Quattroporte, at upwards of 2.2m yuan, is the vehicle of choice for ladies who lunch.
Last month, 130 Ferraris, mostly as red as the Chinese flag, paraded through the streets of Guangzhou in a celebration of the brand's 20 years in the country. When Rolls-Royce launched a $1.2m Year of the Dragon edition of its Phantom, with the creature hand-painted on its wheelbase and hand-stitched on to cushions, all eight sold in two months.
Car firms throughout the price spectrum have come to depend on Chinese buyers. "There is no way to overstate how much foreign companies have become reliant on sustaining success in the Chinese market," says Dunne, who is also author of American Wheels, Chinese Roads: The Story Of General Motors In China. "For GM, Hyundai, Nissan, Volkswagen, Audi, it's already the number one car market in the world. Take China out of their portfolio and their fortunes would reverse."
Some believe that the US – the land of Route 66, T-Birds and American Graffiti – has reached "peak car"; the number of miles driven per person has fallen in recent years. But no one doubts that plenty of room remains in the world's second largest economy, even as its GDP growth cools. In the US, there are around 600 cars per 1,000 people, against a global average of 135, according to the Economist Intelligence Unit. In China? Just 44.
When a report from the management consultants McKinsey warned of slowing growth in the car market in China, it was predicting an 8% annual increase in the near future. That may be a substantial fall from the 24% of recent years – but given the size of the existing market, it should not prove too painful for car firms.
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Star car: workers polish up a Rolls-Royce outside a petrol station in Beijing. Photograph: Chien-Min Chung/Polaris/Eyevine
The government has encouraged car sales as part of the Chinese dream. "The Chinese customer really wants a better life," says Arthur Wang, of McKinsey's Shanghai office, "and when they consider that, they have a house, they have a car." Officials are thinking about the economic benefits. Car manufacturing has a powerful multiplier effect compared with other sectors, fuelling steel production and other industries and, at the other end of the chain, a growing number of dealerships.
Meanwhile, officials have used infrastructure construction to shore up GDP figures and promote development across the country. If Beijing's six ring roads are striking, the national network's expansion is more so. In 2000, there were 16,000km (11,000 miles) of expressway, according to state media; by 2009 that had reached 65,000 and by 2020 there will be 100,000km, roughly similar to the US.
But, Dunne notes, there is now "a bit of a political dilemma" for the government. "It really likes the fact that 95% of cars on the road are built here, thanks to very high tariffs on imported cars. It means investment in factories, jobs, tax revenues. On the other hand, [it is] suddenly confronted with the potential risks to national security in that it is more than ever reliant on imported oil. How do you feed this monster? And the environment is incredibly important, especially to younger Chinese. The government is saying it will tolerate the problems because it wants the motor industry. But it's not an open-and-shut case. They are saying: we have to manage this, because it's big and it could get out of hand."
China is roughly the same size as the US, but its population is four times bigger, and the downsides of car growth are already obvious. In 2011 alone, 62,387 people were killed on the roads, according to the police. Although those figures show the toll declining from a peak in 2002, other researchers question the data and the downwards trend. In 2007, they point out, police recorded 81,649 deaths on the roads, whereas death registrations suggested that crashes killed 221,135.
Cars have also come to symbolise what is worst, as well as best, about the country's breakneck development. For China it is a love-hate relationship, with an ambivalence apparently lacking in America's automobile addiction. Cars have become inextricably associated with corruption and the abuse of power; greed and materialism; environmental devastation; perhaps, above all, the growing gulf between the rich and the rest. Anger erupts when wealthy boy racers mow down less privileged pedestrians. Gossip is rife about luxury models registered to official work units or driven by cadres' relatives. Many believe that a leading politician's hopes of promotion were destroyed this year when his son was involved in a fatal Ferrari accident. When I passed a luxury car crash in Beijing this spring, an old man who had stopped to stare muttered, "It would be better if rich people just died."
Regular motorists moan about the arrogance and bullying behaviour of those in more expensive cars, especially those with official plates. (Not all of these may be genuine: past crackdowns have netted vast numbers of fake military registrations.) People may not care about their own contribution to greenhouse gas emissions, and the effect of rising temperatures and sea levels, as policy-makers do. But they notice when their children choke on smog and they grumble when they inch along because their route to work is clogged by other motorists. When the media group Bloomberg held a race across the capital last month, a bicycle reached the finish line in half an hour – 22 minutes quicker than the Porsche.
Even two-car households often spurn the western one-vehicle-one-user model on practical grounds, as Zhang explains. "The traffic is so bad, we drive one car and he will drop me off halfway so I can get the subway," she says. "It's more efficient than taking two cars to work."
The problems are becoming so bad that Beijing has banned motorists from driving one day a week and limited new car registrations through a lottery system. In 2010, some 790,000 cars were added to the capital's roads – more than 2,000 a day. But officials say only 173,000 were added last year – the first slowdown in growth since 1984. Even that, they think, is not enough of a reduction. In October they said they would consider ordering odd- and even-numbered licence plates to drive at alternate times in specific areas. Shanghai has also taken action and Guangzhou hopes that similar measures will halve the number of new vehicles. Chongqing, a south-western metropolis, has discussed introducing a congestion charge.
Arthur Wang of McKinsey says 15 or 20 cities are likely to reach the congestion levels that prompt such policy changes over the next five years. But most car growth is in small cities and newly urbanising areas, and he sees little prospect of national controls.
Deborah Gordon, co-author of Two Billion Cars and an associate with the energy and climate programme at the Carnegie Endowment for International Peace, says Chinese authorities should seize their chance to curb car usage. Instead, they would be advised to focus on better-designed cities, improved public transport, more efficient cars and more electric or hybrid vehicles. "When economic growth was double-digit in recent years, policy-makers were having a hard time keeping up with rapid changes in motorisation," Gordon says. "They have a golden opportunity now to shape future growth without disrupting it during the economic downturn. If China grows to accommodate autos as the priority form of mobility, it will be very difficult and expensive to reverse these investments."
On a cold late autumn afternoon, shoppers wander the rows of the Huaxiang secondhand car market in south-western Beijing. The city's air is thick with fumes. Buildings loom out of the haze and the sun glows an apocalyptic red. According to local officials, motor vehicles account for about half the capital's air pollution. Clusters of men play Chinese chess and puff on cigarettes under the pearl-coloured sky. Women stamp their feet to keep warm as they swipe at cars with miniature mops; even a boxy, retro-looking Chang'an estate shines as if fresh from the production line.
Zhang Penghao is in search of his first car, without a great deal of enthusiasm. Despite his friendly smile, his eyes are gloomy behind his heavy glasses. "Actually, it's not worth it. There are too many cars and limited roads," the 24-year-old complains. Driving to his job at a hotel would take longer than using the subway; he will reserve the car for visiting friends in the suburbs and, more importantly, for dates. "In China, if you don't have a house or car, you can't get a wife. There's a lot of pressure." His only reason for buying a vehicle is to improve his eligibility. "If a girl can see you didn't drive to pick her up, she won't bother coming out. I don't understand why it's so important, either. It's women, or really the women's parents, who care."
It is no coincidence that the soundbite that has come to sum up modern Chinese materialism centres on a car. When a dating show contestant rebuffed an impecunious suitor with the words, "I would rather cry in the back of a BMW than laugh on the back of a bicycle", they instantly became part of popular lore.
Chinese motorists know they must impress, whether they are seeking partners for romance or business. Roll up in an Audi and you ensure a basic degree of respect. Arrive in a domestic Chery QQ hatchback and you are doomed before you get through a client's door. "People don't really think about whether they need a car, but feel they have to have one to show their status," Zhang's friend Zhao Cihang tells me at the Mini showroom. Until recently he edited a car website and, although he is a year younger than Zhang, already owns two BMWs, an Audi and a Honda. But, he adds, "I still think about new ones. I'd like an SUV – the biggest kind."
SUVs are one of the fastest-growing sectors, thanks to buyers such as Zhao, who see them as smarter than saloons. But Dunne thinks there is something more to the passion for SUVs: "It's symbolic of the aspiration to project the image of a free spirit… They may not use the vehicles off-road, but they want to say: I am an explorer."
Last year, Zhang and her husband drove to Shanghai, a journey of almost 800 miles that is more easily and comfortably covered by plane or high-speed rail. The drive was the point; though they could have afforded hotels, they slept in the Subaru overnight. They speak enviously of the motorhomes they glimpsed on a European holiday. "We hope the younger generation, our generation, can think of cars as a symbol of freedom and use them for travel, so they're not just about achievement and social status," Zhang says.
For a handful of educated urban consumers, cars are no longer simply a sign of how much they have earned, how good their taste is or how suitable for marriage they may be. They are a hint of their inner yearnings, a sign that one day, perhaps, motoring might become embedded in China's culture as it has in the US, the other great nation of the automobile.
Though highways stretch out across the country, there are as yet no road movies. Young men and women cruise around town, but no anthems celebrate today's Chinese equivalent of a T-bird. The Mini dealership's manager enthuses about the ability of cars to express their owner's individuality. But asked if Chinese authors or musicians might one day celebrate automobiles as Americans have, she looks bewildered. "Things like washing machines and refrigerators are part of our life in China, but we don't really have songs about them," she explains politely. "We don't think because refrigerators are popular that maybe someone has to write a book about them."
