January 01, 2003

China Rocks Global Bike Industry

Today, 86% of the bicycles sold in the U.S. are imports from China, even higher end models. This should make China an important ally for the promotion of bike use worldwide.  But their voice is silent.

Ironically, China’s dominance of global bicycle production has occurred while government policy is driving bicycles off Chinese streets. In many Chinese cities, exclusive bike lanes have been converted to mixed-traffic service roads, and bikes are being pushed onto the sidewalks, or banned all together or major urban roads.

Because of the changes in traffic policy, people are operating bicycles in increasingly unsafe road conditions. Annual traffic deaths increased from 50,000 in 1990 to more than 100,000 in 2000, and 38% of these deaths are cyclists.

Unsurprisingly, the drop in utilitarian bicycle use is most pronounced in cities and provinces with major automobile manufacturers. In Guangzhou, home of the huge Guangzhou Motor Group Company-Honda joint venture, bicycle travel has fallen from 33% of all trips in 1995 to less than 20% today.

In Shanghai, home of the Shanghai Automotive Group- General Motors and Volkswagen joint ventures, bike use dropped from 33% of trips in 1995 to 27% in 2000. In Chengdu, which has no local motor vehicle manufacturing, bicycle use has remained at 42% for the last 5 years.

Total bicycle sales have fallen dramatically as well. Bike sales peaked at 40 million, but recently have ranged between 22 million and 25 million sales annually. Even industry stalwarts like Shanghai Phoenix have seen their domestic markets drop by 50%.

One might think that China’s bicycle industry, which directly employs over 150,000 people, dominates world-wide bicycle production, and generates over $1 billion a year in foreign exchange earnings, might try and do something about their declining domestic market.

Yet the biggest bicycle companies are either export-oriented foreign-owned firms uninterested in the domestic market or firms still run by the state. State-owned firms are not actively marketing their products and would not dream of doing anything that criticized state policy, since their management is hired and fired by the government.

The dramatic drop in China’s domestic bicycle consumption and the deregulation and privatization of its bicycle industry has meant falling prices for bicycles the world over. While this is good news for low-income consumers, it has undermined quality and been catastrophic for the industry.

Meanwhile, there seems little hope that the Chinese bicycle industry will play a significant role in advocating for more cycling-friendly domestic transportation policies. For now, the best hope remains a change of heart among China’s senior policy-makers.

This news item has been edited for length.  For the full version, see Sustainable Transport magazine #14.

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