By Haibing Ma and Jiajing Bi

China used to be the "Kingdom of Bicycles"

China’s transportation sector is undergoing a revolution. As the average wealth of Chinese citizens improves, the country formerly known as the “kingdom of bicycles” is experiencing a swell of motorization. In 2009, China surpassed the United States to become the world’s largest auto producer and market.

At the end of 2009, China was home to 170 million vehicles. Projections indicate that the country could add as many as 220 million new vehicles to its market between now and 2020. Already, the transportation sector accounts for about a fifth of China’s total energy consumption.  

The surge in China’s vehicle fleet reflects the rapid rise in ownership of private cars nationwide. On average, the total number of vehicles in China increased 14.5 percent annually between 2000 and 2009. The number of private cars, however, more than doubled between 2005 and 2008 alone.

Yet there is a green lining to China’s increasing mobility. The Chinese government plans to invest trillions of dollars between now and 2020 to make the transportation sector more environmentally friendly, aiming to meet the rising demand for cars as well as the need for better public transport.

According to an forthcoming Worldwatch Institute report on China’s green economy, China can create an average of 2 million jobs per year between 2011 and 2020 by greening its transport sector, including expediting the manufacture of alternative-fuel vehicles and the development of high-speed rail. In addition, the planned expansion of urban rail networks in Beijing alone could bring as many as 420,000 jobs annually over the coming decade.

The government’s dedication to increased investment in green transportation is due in part to the very real environmental and social problems associated with China’s rapid transition to a “car-and-truck” economy. Air pollution is palpable in many Chinese cities, and road and highway congestion has become a significant challenge, illustrated most famously by the country’s nearly two-week traffic jam in August 2010.

Beijing is now known as the “Jam City”

Green transportation, in broad sense, refers to using low-pollution transportation options suitable for urban environments in order to meet social and economic needs. The forthcoming Worldwatch study focuses on the scale and prospects for green jobs in three transportation subsectors: the alternative-fuel vehicle industry (in particular hybrid-electric and electric cars)., inter-city high speed rail (HSR), and urban rail development in Beijing.

Despite its relative newness, China’s alternative fuel vehicle market has been growing rapidly. In January 2009, four national government bodies initiated a joint pilot project, Ten Cities, One Thousand Vehicles, to promote fuel-efficient and alternative-fuel vehicles. The goal of the program is to deploy an average of 1,000 hybrid and/or electric vehicles for public services in each of 10 pilot cities annually during 2009–12.

By mid-2010, some 5,000 alternative-fuel vehicles had already been put into use in China, with just over 81 million kilometers traveled. According to the government’s plan, the market share of so-called “new energy vehicles,” which include hybrid-electric, electric, and fuel cell vehicles, is expected to reach 10 percent by 2012. To encourage rapid adoption, the government released a series of financial incentive policies in 2009–10 that expanded the promotion of alternative-fuel vehicles to private buyers and offered a maximum subsidy per vehicle of 60,000 Yuan (US$9,200).

Spurred by these policies, as much as 8.5 billion Yuan ($1.3 billion) was invested in China’s electric vehicle industry in 2010 alone. Worldwatch estimates that if the government continues to prioritize development of alternative-fuel vehicles in the 2011–20 period, domestic production of hybrid and electric vehicles could reach 16.6 million—15 percent of total vehicle production—and create 1.2 million jobs annually on average. Even if the government placed less emphasis on alternative-fuel vehicles, average annual employment in the industry could still be as high as 640,000 during this period.

China’s achievements in high-speed rail are even more impressive. In the six years since establishing its first HSR line, the country has become the world leader in HSR development. By the end of 2010, China had 17 HSR lines in operation with a total operational length of about 8,400 kilometers—the longest worldwide. The Medium and Long-Term Rail Network Plan projects that this will more than double to 18,000 kilometers by 2020. According to Worldwatch estimates, more than 1,100 billion Yuan ($168 billion) in HSR investment would be needed in the coming decade to accomplish this goal, which could create an average of 630,000 jobs per year.

The latest high-speed train in operation

China’s urban rail system has experienced similarly rapid expansion. During the 10th Five-Year Period (2001–05), China invested 200 billion Yuan ($31 billion) in urban rail construction, putting more than 400 kilometers into operation. By the end of 2007, 10 cities had their own urban rail systems, with 30 lines in operation, and by the end of 2010 the nationwide system had expanded to 37 lines, spanning 1,130 kilometers. Shanghai and Beijing have the longest urban rail networks in China. With new operational lines added for the 2010 World Expo, Shanghai’s metro has now surpassed London to become the longest subway network in the world.

The Worldwatch study uses Beijing’s metro system as an example to explore the potential impacts of urban rail development on employment. The municipal government hopes to increase the operational length of the metro to 660 kilometers by 2015 and 1,000 kilometers by 2020. Worldwatch estimates that would require nearly 1 trillion Yuan ($153 billion) in investment and would create some 420,000 jobs annually over the coming decade. Considering that nine other Chinese cities with existing urban rail will also expand their networks, and that the government has approved similar plans in 28 more cities (with at least one operational line in each by 2020), the job creation opportunities are staggering.

These trends in China’s transportation sector suggest that the country’s green development strategy not only is compatible with economic growth, but can be a powerful economic driver. Indeed, the rest of the world will have trouble matching China’s tremendous investment in green transportation. The Chinese example only strengthens the economic case for a global green transition—and can help boost worldwide confidence about the benefits, including for developing countries.

This is the second in a series of blog posts that report on findings from a forthcoming Worldwatch Institute report on China’s green economy. Read the first blog on the forestry sector here. Please stay tuned for coverage of additional economic sectors.

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alterntive fuel vehicles, China, electric car, emission reduction, energy consumption, green economy, green jobs, green transportation, high speed rail, hybird car, metro, subway, urban rail