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The Evaluation Of Current Government Policies Essay

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The evaluation of current government policies on parking shortage problem in Shanghai and suggest possible solutions.

1. Introduction - Situation of parking shortage problem in Shanghai

The number of vehicles in Shanghai has increased during recent years. There is greater demand for parking spaces. However, the number of parking spaces failed to fulfill the demand for the parking spaces due to various reasons, which leads to parking spaces shortage problem. According to National Bureau of Statistics of China (2012), there were 2.12 million cars in Shanghai in 2012. While the number of registered public parking spaces was 389 thousand till June, 2012, the gap between the supply and the demand is still large and estimated to be around 300 thousand (China Daily, 2012). Also, It is estimated that by the end of 2015 the demand will widen the shortage to 450,000. High shortage of parking spaces will lead to various consequences, such as increased likeliness of illegal parking and higher parking fee. This brings wide range of adverse effects to the urban transport. Yang (2012) pointed out that the parking spaces shortage problem in the city centre was much severe than that of the rural area. Most of the car owners were unwilling to park their cars in the carpark as the parking fee was too high to afford, hence there was always illegal parking at the roadside. The illegal parking record rose from 1.94 million in 2011 to 2.18 million in 2012. Moreover, there were some parking spaces underutilized because of the high parking fee. Thus, it is of paramount importance to tackle the parking spaces shortage problem as soon as possible.

The Shanghai government mitigated the parking shortage problem from supply and demand perspective. From the supply side, the local government introduced mobile parking spaces in the downtown region so as to increase the supply of parking spaces. From the demand side, the city government introduced car plate auction system, which implies all car plates must be obtained through auction system. There is always a fixed number of new cars, thus the growth of number of cars is controlled and the demand for parking spaces is directly reduced.

Apart from the above, the local government initiated P+R transport mode (Park and Ride), in which the car owners could park their cars near the transport hub and then go to city centre by public transports. This act increased the supply of parking spaces and decreased the demand for parking spaces in the core city region.

The effectivenesses and limitations of these policies will be discussed in the following parts. Although there are quite a number of policies implemented, there is still room for improvement. Through investigating into the way the other cities solve parking shortage problem, some improvements can be suggested to optimize the current measures adopted by local government.

2. Causes of parking shortage problem

According to theory of supply and demand in microeconomics, when demand exceeds supply, a shortage occurs. Sellers dominate the market and the price becomes higher. We will analyse the causes from both the supply and demand perspective.


Parking spaces shortage problem is a possible consequence of insufficient supply of parking spaces. There are at least three main factors leading to parking spaces shortage, namely improper urban planning policies, unreasonable structure of parking facilities and insufficient government support.

2.1 Improper Urban Planning Policies in the past

Cycling was the major transportation mode in last century Shanghai, hence many old buildings are only equipped with bicycle parking facilities but not car park. The city lacked foreseeability, this resulted in the lack of vehicular parking infrastructure development. Besides this, many newer constructions are not consistent with the regulations of parking places.

2.2 Unreasonable structure of parking facilities

Li (2013) points out that generally the composition of the parking space of a city should be distributed as follow: required parking facilities (70%~80%), parking area outside the road (15%~20%), parking area inside the road (3%~5%). While in current Shanghai, since the supply of parking lots is very insufficient, many private cars park on roads or even green belts. Also, the use ratio of parking garages is very low since people’s awareness of parking in a garage is relatively weak. They prefer to park their cars on roads if the estimated parking time is not such long, mainly due to convenience and monetary cost.

2.3 Insufficient government support

The Shanghai government did not have a good planning for parking in bygone days. Details have been shown in the previous part (2.1). In these years, we can see the government tried to find remedies for the shortage. In particular, the government wanted to relieve the parking spaces shortage in the city centre through building underground parking. Thus, more underground parking spaces were set up in subways and residential areas (Shen, 2013). However, there were no incentive mechanisms, such as subsidy for constructing parking facilities, to support these construction further. Moreover, the government showed no obvious preferential policies towards parking space construction, hence failed to capture capital. As a result, the development of parking industry was restricted by the insufficiency of parking facilities construction funds. Demand

Owing to surging number of motors, there is a great demand for parking spaces. The rising number of automobile could be brought by various factors.

2.4. Economic boom and symbolization of automobile

After joining the WTO, China’s economy grows rapidly. Chinese has gained benefits during the rapid economic growth, especially for those living in the big cities like Shanghai. The people purchased their cars as they have a higher purchasing power than before and higher demand on living standard. The mindset of “automobile symbolizes wealth” in China has further increased the use of private transport. Hence, the number of cars as well as the demand for parking spaces have been rising continuously.

2.5 Automobile industry in Shanghai

Shanghai has been a place for producing automobiles. Many automotive manufacturing companies set up their headquarters at Shanghai. For instance, Shanghai Automotive Industry Corporation. (SAIC) The company had the highest production volume compared to any other Chinese automotive manufacturing companies in 2012, which 3.5 million cars were produced. (China Association of Automobile Manufacturers, 2013) Great number of automobiles available in the city which could encourage the use of automobile...

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