According to the Wall Street Journal, traffic in China is now approaching the levels in Los Angeles. “China has about 200 cars, as many as in Los Angeles, which has some of the worst traffic in the U.S., according to UBS research.”
The average speed of the traffic is 20 kilometers per hour (12MPH) and it is significant lower in Beijing. China is now taking steps to ban the number of cars on the road. In fact, Shanghai issues only 9-10 thousand license places a month for a cost of $13,000 each.
This kind of control seems to be backfiring as Chinese consumers are responding “by buying more expensive automobiles with bigger engines.” The reasoning is that it makes sense to spend more money on a car since it is going to cost $13K just for the privilege of driving it. Additionally, consumers are concerned future restrictions will prevent them from trading up.