A Shanghai Car Plate is Worth 9,270$ in March, a New Record

To limit the number of privately owned cars in this city of more than 23 million people, Shanghai has done something drastic since 1994: set monthly quotas for new Shanghai car plates and issue them through auctions. As demand has far exceeded the artificially controlled supply, the prices of Shanghai car plates have steadily gone up, reaching record high of 58,625 Yuan (or 9,270 US dollars) on average in March; the lowest winning bid was 58,300 Yuan. The quota for this month is 8,000, over which 24,897 people competed.

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Those unwilling or unable to pay for a Shanghai plate, called by some "the most expensive piece of iron in the world," often register their cars in other cities or provinces where there is no such restriction, but have to face inconveniences or pay extra fees for using their cars in Shanghai. Driving a car with no Shanghai plate, one has to pay a 30 Yuan toll each time entering the city as well as a monthly fee of 150 Yuan if using the car regularly in the city, and cannot access elevated expressways in the city during rush hours.

At the end of 2011, there were 1.954 million automobiles registered in Shanghai, rising from 1.707 million in 2010. By comparison, there are about 5 million cars now having Beijing plates, a city that did not start to limit car registrations until last year.

The Shanghai practice, while effective and bringing in a lot of money for the municipal government, has been criticized on several accounts. Many say it favors the rich and bars many who are financially strained and yet have a real need for a car from owning one (increasingly, cars are no more luxuries in China). To avoid this controversy and be "fair," Beijing has opted for another measure to limit car purchases: the car plate lottery held monthly, in which an applicant for a Beijing plate has to win it by luck.