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Beijing’s Black Market License Plates

Imagine taking out a loan for a new car, but then having to take another loan – twice as large – to buy a license plate on the black market. That’s precisely what is happening in Beijing, where a government clampdown on license plates has fueled skyrocketing prices for plates on the black market.

In a bid to rein in its pollution and traffic jams, officials in the Chinese capital in 2011 instituted a license plate lottery that awarded plates to one in ten people who apply. This year, Beijing cut the new plate allocation by 40 percent to just 150,000, which means only one in 150 applicants will get a plate.

Such impossible odds have created a thriving black market where plates can draw an asking price as high as $33,000 – almost double the price of China’s best selling car, the Ford Focus. Even though it is technically illegal to buy, sell or rent plates, desperate drivers in Beijing have found few other options.

I participated in every lottery over the past two years but have never won. I’m desperate”, said Han Kuilong, an office worker who last month rented a car plate for RMB5,000 (US$830) a year. “I live on the outskirts but work in downtown. Life is very inconvenient without a car”.

Another Beijing resident, Zhang Cheng, has been entering lotteries for the past two years, but to no avail. Most recently, there was a lottery in which 2 million participants vied for about 25,000 plates.

“The government is depriving us of our rights to enjoy a better life. Instead of restricting car plates, they should build more roads and improve infrastructure”, Zhang, who is now seeking to rent a plate, said.

Zhang is not alone. The practice of renting or buying car plates is now so widespread that it has become impossible to police, said Yang Lisha, a Beijing based lawyer.

The hot demand has caused a surge in prices. Just six months ago, a car plate could be bought for around RMB120,000, but this year’s cut in allocation prompted an increase to RMB200,000 a piece, according to a manager at Beijing Sunshine Aomei Asset Management Co., a company that says it buys and sells car plates on its website. Several other car plate dealers corroborated the figures.