 
November 18, 2003
China Set to Act on Fuel EconomyBy KEITH
BRADSHER
 UANGZHOU, China, Nov. 17 — The Chinese government is
preparing to impose minimum fuel economy standards on new cars for the
first time, and the rules will be significantly more stringent than those
in the United States, according to Chinese experts involved in drafting
them.
The new standards are intended both to save energy and to force
automakers to introduce the latest hybrid engines and other technology in
China, in hopes of easing the nation’s swiftly rising dependence on oil
imports from volatile countries in the Middle East.
They are the latest and most ambitious in a series of steps to regulate
China’s rapidly growing auto industry, after moves earlier this year to
require that air bags be provided for both front-seat occupants in most
new vehicles and that new family vehicles sold in major cities meet air
pollution standards nearly as strict as those in Western Europe and the
United States.
Some popular vehicles now built in China by Western automakers,
including the Chevrolet Blazer, do not measure up to the standards the
government has drafted, and may have to be modified to get better gas
mileage before the first phase of the new rules becomes effective in July
2005.
The Chinese initiative comes at a time when Congress is close to
completing work on a major energy bill that would make no significant
changes in America’s fuel economy rules for vehicles. The Chinese
standards, in general, call for new cars, vans and sport utility vehicles
to get as much as two miles a gallon of fuel more in 2005 than the average
required in the United States, and about five miles more in 2008.
This country’s economy is booming, and a growing upper class in big
cities like this one is rapidly buying all the accouterments of a
prosperous Western life, including cars. As China burns more fossil fuels,
both in factories and in a rapidly growing fleet of motor vehicles, its
contribution to global warming is also rising faster than any other
country’s.
But Zhang Jianwei, the vice president and top technical official of the
Chinese agency that writes vehicle standards, said in a telephone
interview on Monday that energy security was the paramount concern in
drafting the new automotive fuel economy rules, and that global warming
had received little attention.
“China has become an important importer of oil so it has to have
regulations to save energy,” said Mr. Zhang, who is also deputy secretary
of the 39-member interagency committee that approved the rules at a
meeting this month.
China was a net oil exporter until a decade ago, but its output has not
kept up with soaring demand. It now depends on imports of oil for
one-third of its needs, mainly from Saudi Arabia and Angola. Before the
war, Iraq was also an important supplier. By comparison, the United States
now imports about 55 percent of the oil it uses.
The International Energy Agency predicts that by 2030, the volume of
China’s oil imports will equal American imports now. Chinese strategists
have expressed growing worry about depending on a lifeline of oil tankers
stretching across the Indian Ocean, through the Strait of Malacca, a
waterway plagued by piracy, and across the South China Sea, protected
mainly by the United States Navy.
Various Chinese government agencies still have three months to review
the legal language in the fuel economy rules, giving automakers some time
to lobby against them; as yet, there has been no mention of the approval
of the new rules in the government-controlled Chinese media.
But Mr. Zhang said that the rules in draft form were the product of a
very strong consensus among government agencies and that “the technical
content won’t be changed.”
Two executives at Volkswagen,
the largest foreign automaker in China, said that representatives of their
company and of domestic Chinese automakers attended what they described as
the final interagency meeting to approve the rules. Under pressure from
the government, these auto industry representatives agreed to the new
rules despite misgivings, the executives said. “They had no choice but to
agree,” one of the Volkswagen executives added.
The executive said that Volkswagen’s vehicles would meet the first
phase of the standards in 2005, while declining to comment on compliance
with the second, more rigorous phase, which is to take effect in July
2008.
The new standards are based on a vehicle’s weight — lighter vehicles
must go the farthest on a gallon — and on the type of transmission, with
manual-shift cars required to go farther than those with less efficient
automatic transmissions.
In a major departure from American practice, all new sport utility
vehicles and minivans in China would be required to meet the same
standards as automatic-shift cars of the same weight. In the United
States, standards for sport utilities and minivans are much lower than for
cars.
The Chinese rules do not cover pickups or commercial trucks. According
to General
Motors market research, there is little demand for pickup trucks in
China except from businesses, because the affluent urban consumer who can
afford a new vehicle regards pickup trucks as unsophisticated and too
reminiscent of the horse-drawn carts still used in some rural areas.
Typically, heavy vehicles are much harder on fuel than light ones, but
the new Chinese standards permit the heavy vehicles to get only slightly
worse gas mileage. As a result, they provide an incentive for
manufacturers to offer smaller, lighter vehicles, which will be easier to
design.
The new standards would require all small cars sold in China to achieve
slightly better gas mileage than the average new small car sold in the
United States now gets, according to calculations by An Feng, a
transportation consultant who advised the government on the rules. But
officials in Beijing would require much better minimum gas mileage for
minivans and, especially, S.U.V.’s than the average vehicle of either type
now gets in the United States.
American regulations call for each automaker to produce a fleet of
passenger cars with an average fuel economy of 27.5 miles a gallon under a
combination of city and highway driving with no traffic; window-sticker
values for gas mileage, which include the effects of traffic, are about 15
percent lower. Light trucks, including vans, S.U.V.’s and pickups, are
allowed an average of 20.7 miles a gallon without traffic.
But the Bush administration has raised the comparable American standard
to 22.2 miles a gallon for the 2007 model year and is now completing a
review of whether to raise limits further for 2008. The administration is
also considering adopting different standards for different weight classes
of light trucks.
Over all, average fuel economy in the United States has been eroding
since the late 1980′s as automakers shifted production from cars to light
trucks. It fell in the 2002 model year to the lowest level since 1980.
Automakers in Europe have accepted European Union demands to increase fuel
economy under different rules that could prove at least as stringent as
China’s minimums.
The Chinese standards would require the greatest increases for
full-size S.U.V.’s like the
Ford Expedition, which would have to go as much as 29 percent farther
on a gallon of fuel in 2008 than they do now in the United States, Mr. An
calculated. Sport utility sales in China have more than doubled so far
this year, but are still a much smaller part of the overall market than
they are in the United States.
Because the American standards are fleet averages while the Chinese
standards are minimums for each vehicle, the effect of the Chinese rules
could be considerably more stringent. A manufacturer can sell vehicles in
the United States that are far below average in fuel efficiency if it has
others in its product line that offset it by being above average. But
under the Chinese rules, the fuel-inefficient models — especially new ones
introduced after the standards take effect — would be subject to fines no
matter how well their siblings do, Mr. Zhang said, and the maker would not
be allowed to expand production of the gas-guzzling models. In Garrison
Keillor’s phrase, China plans to require that every vehicle be above
average.
Mr. An said that at the final meetings on the new rules, the only
outspoken objections had come from a representative of the Beijing
Automotive Industry Holding Company, which makes Jeeps in a joint venture
with DaimlerChrysler.
According to people who have seen the new standards, many Jeep models
sold in China do not now comply with them; neither do the Chevrolet Blazer
sport utilities built by a General Motors joint venture in Shenyang. Some
of Volkswagen’s car models also fall slightly short, these people said. By
contrast, Honda’s
cars, built at a sprawling factory complex here in Guangzhou, the
commercial hub of southern China, would comply easily because they use
advanced engine technology, these people said.
Trevor Hale, a DaimlerChrysler spokesman, declined to comment in
detail. “DaimlerChrysler complies with local regulations where it does
business,” Mr. Hale said in an e-mail response to an inquiry. “It
continues working to improve fuel economy in the vehicles it develops,
builds and sells around the world.”
Bernd Leissner, the president of Volkswagen Asia Pacific, said that his
company’s cars would comply because “it’s just a question of how to adapt
the engine — it’s something that could be done quickly.”
The fastest way to improve fuel efficiency is to switch from gasoline
to diesel engines, as Volkswagen is starting to do in China. The latest
diesel engines are much cleaner than those of a decade ago, but are still
more polluting than gasoline engines of similar power.
A spokeswoman for General Motors, which is beginning to introduce
Cadillac luxury cars in China, said she did not have enough information
about the newly drafted rules to comment on them, but that her company’s
vehicles were comparable in fuel economy to those of rival manufacturers
in the same market segments. Executives of G.M. were preparing for an
event in Beijing on Tuesday and Wednesday when the company plans to
showcase examples of its work on gasoline-saving fuel-cell and hybrid
engines for cars.
In the United States, G.M. has argued that tighter fuel economy rules
are unnecessary because technological improvements will someday improve
efficiency anyway. G.M. and other automakers have also contended in the
United States that higher gasoline taxes would represent a better policy
than higher gas mileage standards, because it would give drivers an
economic incentive to choose more efficient vehicles and to drive fewer
miles.
China is still considering its policy on fuel taxes, but has not acted
so far, because higher fuel taxes would impose higher costs on many
sections of society, Mr. Zhang said.
Another company that could run into trouble over the Chinese mileage
standards is Toyota,
which on Nov. 6 began selling a locally produced version of its full-size
Land Cruiser sport utility vehicle in China. A spokesman said on Monday
that Toyota had not yet heard about the new Chinese fuel economy
regulations, which have been prepared with a level of secrecy typical of
many Chinese regulatory actions.
Japan is also phasing in new fuel efficiency standards based on vehicle
weight that allow heavier vehicles only slightly worse gas mileage than
lighter ones. American automakers have complained that the Japanese rules
discriminate against them because Japanese automakers tend to produce
slightly lighter cars anyway.
China has more than 100 automakers, as Detroit did a century ago, but
the bulk of its output comes from a small number of joint ventures with
multinational companies. Total production has more than doubled in the
last three years, to about 3.8 million cars and light trucks in 2002,
nearly as many as Germany. The United States builds about 12 million a
year, Japan about 10 million.
The cars that Chinese automakers produce on their own tend to be very
small and lightweight, but the engines are built on older technology, and
may not have an easy time complying with the new fuel economy
standards.
The government has been encouraging the industry to consolidate, and
the new rules may hasten that process by forcing investment in engine
designs that small companies may not be able to afford on their
own.
Copyright
2003 The New York
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