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The Scenarios

The scenarios provide two distinct perspectives on the future of mobility in China in 2030. Each future represents a particular trajectory to arrive at the outcome. The pace of economic growth is a major driver in both scenarios, as are environmental conditions and constraints on vehicle ownership and driving. This section provides a synopsis of each scenario.

Scenario 1: The Great Reset

In 2030, China has moved closer to the ranks of developed countries. It successfully weathered what might have been a fairly severe economic crisis through policies that introduced some measure of market-based reform and reduced reliance on personal connections in the economy. Although economic growth has slowed from previous high levels to a more modest average of 6 to 7 percent annually, it did so gradually and without major disruptions. Vehicle ownership continued to grow strongly, with about 240 vehicles per 1,000 people by 2030, even as more and more cities adopted constraints on driving to try to address growing problems of parking and congestion. Long-distance travel increased as well, even with oil prices of USD 150 per barrel. China maintained its position as the world's largest vehicle producer and was even able to increase its export share, largely based on the popularity of so-called new-energy vehicles. Urbanization continued, plateauing at rates similar to those in more-advanced economies, but so did high levels of income inequality. Finally, increased government revenues, especially from local governments' collection of property taxes, enabled the government to address some of the serious environmental problems with air and water quality.

The Great Reset

Market-based reform has led to continued but more-modest economic growth, with rather strong increases in vehicle ownership despite widespread constraints on driving in urban areas.

Scenario 2: Slowing but Growing

By 2030, China has experienced an economic downturn and entered a period of lower growth, averaging about 4 percent. A financial crisis based on unsustainably high levels of debt resulted in a year of very low growth and then a recovery whose gains were not necessarily widely shared. Corruption has continued to be a problem and has kept the economy from becoming more innovation-based because new firms have a hard time getting funding and international investors remain skittish. Environmental problems have continued to affect the quality of life, and lower-than-previous public revenues have impeded the ability of both the central and local governments to address them. Travel demand has continued to grow, along with the auto manufacturing industry, but at rates lower than would have been expected based on previous trends. Car ownership stands at about 185 per 1,000 people, even with oil prices remaining at USD 100 per barrel. The prevailing sentiment is that things could be better, and people try to remain optimistic that eventually they will be.

Slowing but Growing

An economic downturn led to a period of lower but still sustained, robust growth. Environmental problems continue to affect the quality of life, and travel demand is growing more slowly than previously expected.

The Wild-Card Scenario

Acknowledging that what is plausible, believable, or imaginable today can constrain scenarios, we crafted a third wild-card scenario. In scenario planning, wild cards provoke thinking about events that break with trends and constitute paths that differ from the projections that underpin the formally developed scenarios. In this report, the wild card is based on the possibility that China experiences a major debt crisis and ensuing economic stagnation.

Implications for Decisionmakers

Our two scenarios describe different mobility futures. The scenarios are descriptive, not normative—neither is put forward as the ideal path for the future of mobility. In addition, our study did not address the likelihood of one particular outcome versus another. The scenarios are instead indicative of a range of plausibilities. By making potential long-term consequences more vivid, scenarios can support public policy by helping decisionmakers at different levels of government, as well as in the private sector, envision what the future might bring.

Our analysis revealed three driving forces as being significant in this regard: (1) the pace of economic growth, (2) the amount and type of constraints imposed on vehicle ownership and use, and (3) environmental conditions. The first and third are exogenous to transportation. Although officials can try to spur economic growth and clean up environmental degradation, success is not necessarily guaranteed; other factors come into play as well. However, the second, constraints on vehicle ownership and driving, is largely within the purview of local officials. In applying the scenarios to decisionmaking, we identified two possible approaches: (1) identifying leading indicators and (2) determining opportunities, risks, and contingencies.

Conclusions

This project created two scenarios, the Great Reset and Slowing but Growing, to illustrate the paths that might result from interconnected effects of market, policy, and consumer forces. The study identified three critical uncertainties, or driving forces, that cause one path to emerge over another: the pace of economic growth, constraints imposed on vehicle ownership and use, and environmental conditions. Of these, by far the most critical is economic growth. The potential for transportation decisionmakers to influence economic growth and environmental conditions is limited. However, they will have greater opportunity to use constraints on vehicle ownership and usage to reduce the growth in travel demand.

Acknowledgments

We thank the many experts outside RAND who contributed to the expert workshops. They were gracious with their time, as well as their honest opinions about future projections in their respective areas of expertise. Experts at the demographic workshop were Judith Banister of Javelin Investments; Christopher Cherry of the University of Tennessee, Knoxville (who also provided helpful information on electric-bike usage in China); C. Cindy Fan of the University of California, Los Angeles; Peilei Fan of Michigan State University; Abhas Jha of the World Bank; Ziqi Song of Utah State University; and Loraine A. West of the U.S. Census Bureau. Our economic experts were Patrick Chovanec of Silvercrest Asset Management Group; Damien Ma of the Paulson Institute; Paul Marks of Argosy International; Stephen Markscheid, an independent director; Samm Sacks of Eurasia Group; and Zhirong "Jerry" Zhao of the University of Minnesota.

We promised anonymity to our Chinese workshop participants, so we thank them here as a group. They provided valuable insights and helped us understand the current context for transportation and energy policies.

We could not have held workshops in Beijing without extensive assistance. Zhang Xiliang and Ou Xunmin of Tsinghua University identified experts and persuaded them to participate, reviewed our translated materials, and ensured that the workshops went smoothly. Jiao Liyan of Tsinghua University supported their efforts by assisting with logistics. Our subcontractor, James Kuo-Ann Chiao of International Transformation Advisory Consulting, very ably facilitated the two Beijing workshops, and Mona Han, then a student at Columbia University, served as our note taker. Mu Dan Ping, who advises RAND on doing business in China, was very helpful in identifying potential partners in China and providing general guidance on working there.

At RAND, Samuel K. Berkowitz conducted much of the research for the background paper on transportation supply and constraints, and Bonny Lin and Keith Crane contributed valuable advice about Chinese experts and the importance of adjusting some of our workshop processes to be more suitable to use in China. Howard J. Shatz and Scott W. Harold reviewed early scenario drafts. Gina Boyd prepared the reference section. Andria Tyner, formerly of RAND, handled numerous travel itineraries and reimbursements that made the workshops possible. We also thank Karen Echeverri and her team in facilities in making one of our workshops happen even as Washington, D.C., shut down for a snowstorm.

Finally, we thank David Dollar of the Brookings Institution and Scott Harold of RAND for their thoughtful review comments, which greatly improved the final report.

 
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