Driving home the cost of Beijing's growth

THE GOLDEN WEEK holiday this week came as a relief to many in Beijing but none more so than your correspondent. The commute home by taxi took 30 minutes, compared to the usual 45 to 90 minutes of stop-and-go traffic.

In fact, the entire week was a joy for the simple reason that getting around Beijing was a cinch. A meeting that normally required an hour's head-start to be on time needed no more than 15 minutes.

The air was crystal clear and the sky verged on blue - a rarity in this town. Riding a bicycle was again a pleasure rather than a life-threatening activity. The good life, however, will come to an end next week when the holiday is over and cars once again flood Beijing streets.

Beijing's bumper-to-bumper traffic is a sign of how, in some respects, the country's reckless growth may be doing more damage than good. China's planners now need to focus on how to handle some of the unwelcome by-products of wealth. Traffic congestion is an example of the conflicts emanating from some of China's policy decisions. On the one hand, the central government is encouraging state banks to flood the market with cheap car loans, pumping up vehicle sales and supporting GDP growth.

Meanwhile, Beijing is coming to a standstill because the road network cannot handle the traffic. That has to be bad for productivity.

Beijing is home to 12.8 million people with a working population of about 4.5 million. Assume every working man and woman loses about an hour a day in extra commuting time.

Further assume the average annual salary is 20,000 yuan (HK$18,690) - equivalent to about 78 yuan a day or 10 yuan per hour. Add those numbers up and you get 11.4 billion yuan a year lost to traffic congestion.