China’s Zhejiang Province Proposes to Let Cities Limit Vehicles

China’s eastern Zhejiang province is proposing to allow its cities to limit the number of new vehicles to control traffic congestion, the latest in the world’s largest auto market to consider such restrictions.

The Zhejiang legislative affairs office held a briefing today in the provincial capital of Hangzhou to discuss the draft plan released last week, according to a statement posted on its website. The plan included provisions empowering cities to limit the issue of new vehicle-license plates, increase parking charges and improve public transportation.

The plan, if approved, will pave the way for cities such as Hangzhou and Ningbo to follow Beijing, Guangzhou, Shanghai and Guiyang in limiting auto purchases. China is grappling with air pollution and worsening traffic congestion in its major cities as the number of vehicles surged with government subsidies in 2009 to spur domestic demand during the global financial crisis.

“With worsening traffic jams in major cities, we may see more and more cities adopting measures to limit vehicle purchases or usage,” said Xu Minfeng, an analyst with Central China Securities Holdings in Shanghai. “Over the long term, such measures will damp vehicle purchases in China.”

Zhejiang lies south of Shanghai and is home to many of the country’s biggest private companies, including Zhejiang Geely Holding Group Co., the owner of Volvo Cars, and Alibaba Group Holding Ltd. The province had 6.75 million civilian vehicles as of the end of 2011, the fourth highest tally in the country, according to data from the National Bureau of Statistics.

Xi’an, home of China’s terracotta warriors, discussed limiting vehicle ownership last year to control traffic congestion.

— With assistance by Tian Ying

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