April 17th, 2013

To Chinese Overseas Students in US

Dear friends,

I am as horrified, and as heartbroken as many of you are to hear about the tragedy in Boston.

Dorothy came to this country with as much hope and dreams as you and I did — a life so beautiful and so full of promise, only to end so abruptly! The impact on her family and loved ones will never go away. And as for the rest of us, the terror that seized upon us may inevitably make us question the American society, and the choices we (and in some cases, our parents) made to come here.

But we must be stronger than we’ve ever been. We must be better than we’ve ever been. If we allow the violent extremism and terrorism to shake us and terrify us, then they would have won.

Even though we are on a foreign land, we have each other and we have our school communities. Reach out to each other. Make sure no one is left alone.

In South America, the biggest hazard to survival is the constant flooding, but the red ants, all be it so small individually, would hold onto each other to form living waterproof rafts. This is the time we need to hold onto each other. Make sure no one is left alone.






February 20th, 2013

What Would China’s Carbon Tax Regime Look Like

My Twitter stream is bubbling with excitement about China’s introduction of carbon tax: Quartz, Think Progress, etc. all reported on the Xinhua report, but the larger context is missing and the key questions about the implementation are not answered.


  • It’s an environmental tax, not a carbon tax

The first thing I want to clarify is that calling it a “carbon tax” would be a gross misnomer, because for a long time to come, the majority of the tax collected from this would still be from what used to be called “pollution discharge fees”, not from taxing carbon emissions. It’s a change in form, but still a significant one, and here is why:

When pollution discharge only triggers a “fee”, local government habitually using this fee reduction or even elimination as an incentive for industries to settle into their jurisdiction and generate GDP. Since the fee is administrative, not legal, industries can easily evade the fee by building a close relationship with the local government, without running into legal issues. A conversion of that “fee” to “tax” would place legal responsibilities on the companies.

The tax on carbon would in fact be puny. The Xinhua report noted that previous MOF expert suggestion for the carbon tax was 10 yuan (US $1.5) per ton of carbon dioxide in 2012, with gradual increase to 50 yuan ($7.9) per ton by 2020.


  • The distortion of price signals in China’s fiscal system is the main reason for the low-quality economic growth and structural imbalance

Enough has been said about the imbalance in China’s growth model: at the macro level, it takes form in over-reliance on investment and exports to stimulate economic growth, while domestic consumption is inadequate (only 35% of GDP); at the micro level, it’s long-term reliance on limited added value, low labor cost, over-consumption of energy, resources, and the environment, and a lack of homegrown brands, technology and innovation, etc. etc. The main reason for the low-quality and imbalanced economic growth is the distortion of price signals in China’s fiscal system. For instance, the low interest rate lead to over-investment and excessive capacity.  The artificially low resource and environmental cost lead to the overuse and severe environmental degradation.

China now burns as much coal as the entire rest of the world combined, a whopping 3.8 billion tons in 2011, but what most reports miss is that the tax on coal in China is merely 2-3 yuan (US $0.4) per ton, and 8 yuan (US $1.27) per ton for charred coal, even though the price of coal has increased to several hundreds of yuan per ton.

The point of a carbon tax, be in China or elsewhere, is to set the price signal straight. We tax income; we tax property; we tax goods and services — all the things we want more of, so wouldn’t it be logic to actually tax the thing we want less of: pollution?

My environmental law professor Jody Freeman, who served as Counselor for Energy and Climate Change in the Obama White House before coming back to Harvard, told us that she used to say two words to almost everyone she met at the White House – “carbon tax”, and they would look at her as if she was crazy. This needs to be changed. If the giant climate rally in DC this past Sunday is any indication, that is we need a sensible policy to address the reality and challenges of climate change now. And in the case of China, I think starting with adjusting the distorted price signals, while giving due consideration to the widening income gaps and social injustices, is essential.


  • Implementation: A tax regime reform that incorporates environmental tax

As previously stated, this environmental tax is mainly converted from pollution discharge fees. Previously, pollution discharge was inspected by and the fee was charged by environmental protection bureaus. The environmental tax, however, is collected by the tax bureau according to the amount of pollution discharged by factories, and that amount is corroborated by the environmental protection bureau. That is to say, the environmental protection bureau becomes an agency that collects statistics for tax purposes.

In 2012, Hubei Province started collecting environmental tax within 100-kilometer periphery of the capital city Huhan, after a test run at Huangshi city. 10% of Hubei’s environmental tax goes to the central government, 15% to the provincial government and 75% goes to the municipal and county government, with the exception of thermal power stations with above 300MW capacity – 10% of their environmental tax goes to the central government and 90% to the provincial government.

The revenue from Hubei’s environmental tax goes to a special “environmental protection fund” that invests in de-sulfur and de-nitrate efforts, supports environmental projects, the prevention of local pollution, and the development of environmental technologies. Hubei government also stated that projects in these field are eligible for loan interest subsidies.

On a national level, the tax regime envisioned by the Ministry of Finance would be that the provincial government’s revenue mainly comprised of turnover tax (which includes environmental tax) and income tax, municipal and county government’s revenue mainly comprised of property tax, and subsidized by action tax (such as tax on large scale entertainment) and special purpose taxes. Since the mid-1990s, the central government strengthened vertical control, and adopted “tiaotiao” management in a number of systems including the tax system. This means that local tax bureaus are directly managed and supervised by the tax institutions of a higher level. Though they have working relations with the government at the same level, they are not managed by the local government. Jia Chen, senior official at Ministry of Finance, noted that under the tax reform, provincial government would be given proper tax management authority, despite the centralized tax system, in order to nurture local tax sources.

I should note that the proportion of environmental tax in the overall revenue of any level of government would be tiny, as is the pollution discharge fee portion of the revenue mix now. Local governments would continue to come up ways to give industries tax rebates and subsidies to attract them to their own jurisdictions, so the effect of the environmental tax or the carbon tax on the industries would be negligible. Standardizing fees into a tax is a step in the right direction. China can use a price on carbon, and environmental issues in general, as a starting point to address the price distortions that are stifling its long-term growth.



February 4th, 2013

Key Issues in US/World Energy

I attended several interesting energy conferences in the past week, including Energy Innovation 2013 and a two-day private meeting at Brookings (which is why I can’t make references as to who made which remarks). Here’s a run down of the key issues discussed in these conferences. Do you agree or disagree with some of these points? And how do you see the future of world’s energy?

Natural Gas Vs. Renewables

Arguments for natural gas:

  • Yes, solar panel price is down, but there is still balance of system cost. High penetration of wind and solar is not a trivial issue, because someone would have to bear the cost of natural gas power running at 15% capacity. Now every 4 GW of wind needs 3 GW of natural gas to balance it.
  • Natural gas buys us time to solve renewables’ intermittency problem.
  • Natural gas is the killer app for coal in US and many other countries. Gas infrastructure is least capital intensive. Less sunk cost and easy demand response.
  • Think about cost not just as the cost of technology, but the total cost of deployment. Even though the solar panel price is down, the “soft cost” isn’t in the US. Cost of installation is $2-2.60/watt in Germany, and twice as much in US.

Arguments for renewables against natural gas:

  • Instead of looking at solar as energy source, think about it as part of an integrated system with demand response EV.
  • Water use in energy is second largest water usage behind agriculture. And fossil fuel is heavy in water use whereas renewables isn’t.



  • US can’t back renewables with subsidies like Germany did with solar. It’s not sustainable. All subsidies, fossil fuel and renewables, should be eliminated in US.
  • PTC now is promiscuous and funds any wind project. It has to do more in innovation, and be allocated in smart and advanced projects such as combined wind and storage.



  • Until the public are more educated on radiation and nuclear, we won’t go far in the area. However, Nuclear Regulatory Commission’s responsibility is public safety, not advocacy, not to inform and educate the public.


Innovation and the Way Forward

  • US and Europe are irrelevant to future energy demand growth, which would happen in developing countries like China, India, South America. And innovation comes out of growth — China’s CNOOC has $15 billion in energy innovation budget.
  • We must harness the best system we know of, capitalism, to deal with emissions. Put a price on carbon and give businesses the profit motive.
  • We need to bear in mind that we are solving a global problem, so we need scaleable, global solutions and bipartisan agreement.
  • We need to note how risk-averse US has become.
  • We don’t have time, yes, but the question is how to get to zero-carbon. We need a cure, not just to slow down the symptom.


Energy Access

  • We must remember that more than 1.4 billion people worldwide have no access to electricity, and 1 billion more only have intermittent access. Energy access is life saving. Average lifespan for people without electricity is more than 30 years shorter than the rest of us.
  • Despite trends in population growth and urbanization, energy access will continue to require a combination of on grid, mini-grid and off-grid solutions.
  • Don’t overlook the transaction cost for energy access, e.g. in India, it takes 7 years to get permission and licensing from all relevant agencies for a small hydropower.
  • The key to sustainable energy access is not the technology. It is critical to establish sustainable institutions with the management capacity, sound revenue-collecting systems, good business practices. Advanced metering is not the only solution, we must engage with the community, finding people who are trainable. Community participation is the KEY to success.
  • Here when we discuss eliminate subsidies for fossil fuel, we must remember lots of these countries lack the social safety net, and see the natural resource reality of that country.

December 28th, 2012

How Fat Big Ocean Saved My Voice

Five days before Christmas, I woke up, tried to say good morning to “grandpa” in the living room — my voice didn’t come out. I tried again, nothing.


I had been coughing for the past two days, but never thought I’d lose my voice completely.

Three days before Christmas: I started to think that I used to sound like an angel. Not that I ever sang, but I missed singing to trashy songs on the radio like the one about never getting back together with the ex-boyfriend.

Then Damien and his wife took me to Chinatown where we got some cola seeds. They are called pang da hai in Chinese, which literally means “fat big ocean”. The whole pack has at least 40 seeds and only costs $3.75!

Why are they called “fat big ocean”? As you can see, these dried seeds are the size of almonds:

After you put them in the hot water for a while, they bloom like flowers. The tea from these cola seeds has been used to cure sore throat in China and South Asian countries for hundreds of years. And they worked magic on me! Now I have a really cool deep voice and am on my way to full recovery. Yay! Merry Christmas!

November 26th, 2012

Hey China, Haven’t Seen You for Two Years (Part 1. The Business of Studying Abroad)

The last time I went back to China was more than two years ago — my mom was not happy about this, nor was my appetite for typical Chinese delicacies like steamed buns with soup, fried steam buns, durian puffs, sweet and sour fish, oh the list goes on and on.

This time, I went home with a suitcase full of vitamin supplements.

Not that China doesn’t sell GNC products, but “you never know if they are the real deal or condensed flour”, as my mom said. Her skepticism is well founded. After all, this is a nation with “gutter oil” found in medicineschromium in drug capsules, and cancer-causing toxins in baby formula, a nation where merchants have no moral code and consumers therefore have no trust in any product.

You may have read my blog post from last time, in which I described the major theme of my trip as “blind-dating”. This time however, it’s all about “studying abroad“.

I could write about how polluted Hangzhou has become, or how unsafe the new Hangzhou subway is going to be (which already collapsed once during construction) but persisted because of the government’s blind push for investment and big infrastructure projects. Yet I feel the wave of people, especially young Chinese, wracking their brains, using all resources and contacts, to study abroad ( in US, Europe or Australia), or to invest there, to buy property in the hope that one day their children would have a chance to study there is indicative of a number of major issues and trends in China. Please allow me to elaborate.

Even before I went back to China, I have received many emails and “friend requests” on Renren (a Chinese copycat of Facebook) from my high school alumni in China, children of my family friends’, and even complete strangers who came across my name somewhere online next to the magic words “Harvard University”. Their questions to me are always similar: “I want to go to Harvard, this is my background, what are my odds?” Yet it wasn’t until after I got back to China that I realized what kind of fever the country is in for studying abroad.


I’d like to make three observations:

  • First, studying abroad is an enormous and growing business for both Chinese nationals and for foreigners;
  • Second, the huge waves of young Chinese people going abroad is indicative of a variety of social issues that goes beyond simple dissatisfaction with the country’s education system;
  • Third, these “international” young people will eventually have an impact on China’s political future.


Part 1. The Business of Studying Abroad

Matthew was my “math-genius” classmate throughout elementary school, high school, and college. Graduated top of his class, he got into the Master’s program in mathematical finance at Columbia University in New York. At Columbia, he continued to be the type of student whose homework assignment was handed out to everyone as the correct answer sheet. That’s why he shocked everyone when he went back to our hometown after graduation and started teaching SAT and TOEFL at a company founded by one of our high school alumni.

He said the US finance industry in 2011 was extremely hard for a foreign graduate student to get into despite his Columbia pedigree. With his flawless English and Ivy background, he was so sought-after in his institution that during the summer, he was offering 286 classes per month! Needless to say, his salary was also commensurate to what he would have got as a freshman on Wall Street. His institution is doing so well now that they are expanding offices in North America in order to cater to the needs of foreign, especially Chinese students in US. So within a couple of years, Matthew is going to make a comeback to New York — not working for a US financial company, but leading a team of young ambitious Chinese to establish a New York division of this studying abroad service company.

Matthew is not the only one of my former classmates now in this business. In fact, two of my high school friends are now the Presidents of two different studying abroad test-prep companies, each using their strengths to compete for students. Beau, an American friend, started a company with his Chinese friend at Yale to provide one-on-one mentorship for Chinese students during the entire process of choosing American colleges/programs and applications. All of them are telling me the same things:

1. The demand is growing exponentially.

According to the Blue Book published by Social Science Academic Press (China), China sent 339,700 students overseas in 2011. The rate of increase in number of going abroad students is between 24-27% in the past four years. A conservative estimation of the studying abroad service business puts it at 60 billion RMB (US $9.55 billion) per year.

2. Younger and younger students are seeking to study abroad.

My friends’ client base has shifted from mainly Chinese college students seeking graduate programs to high school students hoping to go to college abroad, and the trend is it’s going even younger. In 2010, 19.8% of the students who went abroad were high school and/or below; in 2011, that percentage rose to 22.6%. During my trip this time, many parents asked me if I have contacts who can help them send their kids to American or British private schools. So if you are super connected with the secondary education system in US or UK, and want to have a business based on that, you would be in hot demand in China.

3. American schools are the most attractive to the Chinese students….

This is the reason why witnessing the dysfunction of the Congress in DC has not dispirited me about America. The US high education institutions continue to have tremendous attraction to international talents. Part of it, I believe, thanks to the wonderful American professors who take sabbaticals overseas. After the international students (Chinese, in this case) have experienced their passionate, substantive, charismatic, and unconventional (compared to their native teachers) teaching, they become hooked with the American high education system. Those professors are, for lack of better analogy, the traveling advertisements for American education.

Institute of International Education‘s Open Door Report shows that 194,029 Chinese students are studying abroad in US in 2011/2012 period, a 23% increase from the year before, while the number of Chinese students in Australia and UK are around 167,000 and 90,000.

4. … But the Chinese colleges repelled the students even more.

My elementary school teacher said there was no way her 16-year-old son could survive a Chinese college when the time came. “He’s so creative.” She said, “He’s curious about everything and loves to design experiments to test his ideas.” Her son was already suffering from the standardized tests in high school, and she was convinced that a Chinese college would kill the sparkle of creativity in him.

A high school alumna who went to the same college in Beijing as I did told me that she wanted to go to grad school in the US because she hasn’t “learned anything during the four years in college,” and that she had to “have some education“.

As for why the Chinese high education system, including gaokao (the college entrance exam), is turning away so many students, it touches upon bigger issues such as the corruption of (academic) integrity, lack of (academic) freedom, etc.

 5. More importantly, these overseas Chinese students are going back/ planning to go back to China.

Like my friend Matthew, and Beau’s Yale-educated Chinese business partner, many overseas Chinese students are going back to China for work. Partly due to the world economic down turn, the number of overseas students returning to China has reached 186,000 in 2011, maintaining a 31% increase in the number of returnees in the past two years. The reasoning for many Chinese who sought education abroad is that their foreign degree would prove to be useful when they go back to China. Holding a foreign degree is seen as a sign of “real education”, “being cultured, and worldly”. It is seen as a good credential to realize their ambitions in China. Their calculation of future opportunities and development is very interesting, and would have profound influence on the country’s political future.






November 15th, 2012


Per Dr. Xu Zhiyong’s request, I’m posting his open letter to China’s new Chairman Xi Jinping:























































































































公民 许志永 2012年11月


October 22nd, 2012

Hey, I Discovered a New Continent!

Check out those three articles, what do they have in common?

CNN Money: Japan Owns Almost as Much U.S. Debt as China, by Chris Isidore

Forbes: Community Wind Projects Poised To Take Off In Denmark, by Justin Gerdes

The Next Web: China Mobile Remains World’s Largest Operator, India’s Bharti up to Fourth: Report, by Jon Russell


First, Japan had been the biggest foreign holder of US treasury securities for a good part of the 1990s and 2000s, with the exception of being slight taken over by UK in 1998, but quickly regained its top position. It was not until September 2008 that China began to surpass Japan as the largest foreign holder of US debt.

All of a sudden, this article and the accompanying graph made it seen like China has been the No. 1 foreign holder of US debt, and Japan is coming from behind, just about to catch up, which is the complete reversal of recent history.


Second, let’s examine the community wind project in Denmark article. Since the oil crisis in the 70s, the Danish government has encouraged private ownership of wind turbines through a variety of subsidies. As early as 2001, over 175,000 households in Denmark owned 80% of the country’s wind turbines. Here’s a historical ownership chart of wind turbines in Denmark.

As you can see, community wind projects is really no news at all since the 1990s, so I wonder where the headline “Community Wind Projects Poised To Take Off In Denmark” comes from?


At this point, you’ve probably got my drift. Can we have bloggers checking out the past 20 years’ history before announcing they’ve discovered a new continent? Thanks!



October 17th, 2012

Perhaps an Important Article Calling for Reform?

An article published yesterday on CCP’s flagship magazine Qiushi has been receiving a lot of attention. South China Morning Post reports with the startling headline “Reform or perish, journal warns Communist Party“. It is also covered by Xinhua: “CPC magazine praises reform, opening-up policy“. When I first read it, however, I was not impressed: it is the usual CCP publication filled with official jargon every Chinese high school students can recite from start to finish. Nevertheless, such an article appearing in the front cover of THE party magazine at the eve of the 18th Party Congress reaffirms the position of Deng Xiaoping’s policy and damps down the voices calling for a change of course in this social and economic environment. Here’s a rundown of the arguments in this article.


Striving to Push Forward Reform and Opening Up

Qiu Shi, on Qiushi Magazine. 2012/20

Hu Jintao‘s speech July 23 underscored the significance of reform and opening up on building socialism with Chinese characteristics. We must study, understand and carry out the spirit of Hu’s speech and insist on the development of socialism with Chinese characters, achieve the revitalization of the Chinese nation.

1. Reform and opening up is an important meaning of socialism with Chinese characteristics
Reform and opening up pushed socialism with Chinese characteristics forward in practice. With the deepening of reform and opening up, the construction of socialism modernization also speeds up. In fact, socialism with Chinese characteristics is perfected through reform and opening up, and will lose the vitality without it.

2. Reform and opening up is a strong force pushing the development of the Party’s and people’s undertakings

China has achieved great progress since the third session of the 11th CCP Congress. Reform and opening up opened a new realm for the Sinolization of Marxism and pushed the Party and the people to emancipate thoughts, seek truth from facts and advance with the times. It has emancipated and developed social production force, pushed forward the fast development of the social economy, and has become the fundamental means to resolve our main social conflict. Reform and opening up has deepened institutional reform, pushed forward the self-perfection and development of the socialism system, and has become the fundamental guarantee to ensure the superiority of the socialism system. In addition, it has sparked a historical change in relations between China and the rest of the world, promoting the country’s socialist modernization drive to adapt to the global development trend.

3. Pushing reform and opening up forward at a new historical start point

China is currently at a period to address the difficult issues of comprehensive establishment of a“xiaokang” society, deepening reform and opening up, and fast transition of economic development model. We must let the spirit of reform and opening up penetrate every link of governance, always adhere to the correct direction given by reform and opening up, always increase the scientific standards of it, and put emphasis on building a more dynamic, more efficient and more open institutional framework that promotes scientific advancement.

Reform and opening up is a great new revolution that cannot be rushed. The conflicts encountered during this process can only be resolved by deepening reform, and the problems within development can only be solved through scientific development. We must hold on tightly to this period of critical strategic opportunity, insist on emancipating thoughts, seeking truth, advancing with time, and be not afraid of reform and innovation. We must insist on the roadmap and policies since the third session of the 11th CCP Congress, and persist on the advancement of reform and opening up, so as to gain a broad prospect for socialism with Chinese characteristics.




September 12th, 2012

NEA Releases 12th FYP for Solar Power Development

The Chinese National Energy Administration (NEA) just unveiled the Twelfth Five Year Plan for Solar Power Development (“The Plan”), in which it laid out the general principals, overall goals, and key tasks for China’s solar energy development.

The Plan set the goal at 21 GW solar installation capacity by 2015, with an annual power generation of 25 TWH. It puts emphasis on establishing a 10 GW distributed photovoltaic power generation systems that are combined with architectures in the Middle and the Eastern regions. In regions with abundant sunshine and available land such as Qinghai, Xinjiang, Gansu, Inner Mongolia, etc. the emphasis is on increase the local power supply by constructing and connecting 10 GW photovoltaic power stations to the grid.

The nine key tasks are:

1. promote the construction of solar power plants

2. expand and promote distributed solar photovoltaic power generation

3. establish renewable energy microgrid model projects

  • in remote townships in Tibet, Qinghai, Xinjiang and other Western provinces.
  • in densely populated coastal areas and other special areas in Zhejiang, Fujian, Guangdong, Guangxi, etc.

4. establish renewable energy model cities

  • 100 models cities and 1000 model districts for renewable energy in the Twelfth Five Year period

5. improve solar power generation technological innovation system

6. increase the sustainable competitiveness of solar products

7. establish and improve solar power industrial system

8. promote the healthy growth of photovoltaic manufacturing industry

9. actively engage in international cooperation


September 11th, 2012

China’s EV Outlook – Shanghai to Roll out Additional Subsidies

In September, Shanghai officials announced that it would soon establish municipal subsidies for alternative fuel vehicles (AFVs): vehicle buyers can receive up to 40,000 RMB (US $6,310) in local subsidy and 60,000 RMB ($9,465) in national subsidy, and a free “green” vehicle license. The new municipal subsidies may be in place as soon as October this year.

Note that a vehicle license is about the most expensive piece of metal in a major municipal like Shanghai because of the enormous demand for new cars and a limited number of licenses given out every month in auctions. As a result, the average price of a vehicle license is around 65,000 RMB ($10,254).

This means that Shanghai AFV buyers can receive up to around 165,000 RMB ($26,000) in subsidies, even higher than buyers from Hangzhou, who now enjoys the most generous AFV subsidies at above 120,000 RMB ($18,930). Guangdong has a similar free vehicle license policy, but since the demand for new vehicles in Guangdong is lower than that in Shanghai, the license price averages at around 22,822 RMB ($6,300).

As early as 2010, Ministry of Finance, Ministry of Technology, Ministry of Industry and Information Technology, along with National Development and Reform Commission have decided to make five municipals – Shanghai, Changchun, Shenzheng, Hangzhou, Hefei – the testing ground for municipal AFV subsidies. EV charging stations have also been constructed in Beijing, Hangzhou, Shanghai, Chongqing, Wuhan, Guangxi and over 22 cities. (Li Ling, 2010) By the end of 2011, China has constructed 243 charging and exchanging stations, and 13,283 charging poles. (China Automotive Energy Research Center Tsinghua University, China Automotive Energy Outlook 2012, Science Press, Beijing, 2011, p. 237.) Each charge station contains 40 – 80 spots for individual EVs, and they can charge an EV in 10-30 minutes. This impressive infrastructure is a a result of the government’s $15 billion investment (compared to US $2.4 billion in EV development). (Andrew Meggison, 2012) Despite the infrastructure investment and subsidies, China only sold around 8,000 EVs in 2011, (China Electric Vehicle Report, 2012) compared with 17,345 sales of Nissan Leaf and Chevrolet Volt in 2011 in US, first year they are on the market.

The Chinese government obviously felt that the EV market needed another bump. On July 9th, State Council published the 2010-2020 Development Plan for Fuel Efficient and Alternative Fuel Vehicle Industry (in Chinese), which set the sales goal for electric vehicles and hybrid vehicle sales at 500,000 nationwide by 2015; set the production goal at 2 million and cumulative sales at 5 million by 2020. That’s why we are seeing municipalities competing to roll out additional subsidy for AFVs.

However, there are remaining ambiguities about such municipal subsidies.

1. What are the covered alternative fuel vehicle?

When the subsidies were first introduced in China, the emphasis was on pure electric vehicles. Then the national policy expanded the definition to include hybrid vehicles, which are now the most active kind of AFV taking advantage of the free license in Guangdong.

2. Available to private car owners?

Are these subsidies only available to public transportation vehicles, i.e. electric buses, etc. ? Or would they be made available to privately-owned cars as well? This remains unknown until the guidelines are published.

3. Local manufacturer bias?

In Guangdong, de facto only three models were eligible for the AFV subsidy, among which the hybrid model from Guangzhou Auto Corp.-Toyota was the biggest winner. Therefore the Guangdong policy has been criticized for its bias towards local manufacturers. It’s yet to be seen whether the Shanghai subsidy will favor its local SAIC Motor models.


Given the overall policy environment, here are the projections for the fuel mix of the passenger vehicle fleet in China:

(China Automotive Energy Outlook 2012)


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