Toll policy ignores road operators, businesses

At the beginning of August, the State Council, China's cabinet, announced a plan to exempt passenger vehicles and motorcycles from paying road tolls during the country's four major holidays - including the Spring Festival and the National Day holiday - in order to encourage travel during these periods.

These toll-free periods, which are expected to extend beyond holidays and apply permanently to passenger vehicles, underscore the government's ongoing efforts to promote consumer spending by making it less of a hassle for people to hit the road, and ideally go shopping along the way. Yet, axing road tolls for personal vehicles will also intensify the financial burdens of China's many heavily indebted road projects, exacerbate traffic congestion during peak travel times and offer no relief to the country's commercial vehicle operators or businesses bogged down by heavy logistics expenses.

With China's push to build a nationwide transportation network still in full swing, many local governments usually appoint or establish construction and management firms to build and oversee local highway projects. In order to fund these expensive road projects, the companies behind them, which are backed by local authorities to varying degrees, are allowed to issue bonds and the money collected from tolls is essentially the only source of revenue these firms can access.

Under these circumstances, it's no wonder that so many highway firms have proved reluctant to wave tolls. And with the National Day holiday less than two weeks away, there are still some local governments which have failed to publish detailed regulations for how to implement the toll-free policies, pointing to a lack of enthusiasm for the State Council's plan.

Additionally, granting free road access to motorists driving passenger cars will only add to the gridlock China's crowded highways always host during holiday periods. The country's travel and tourism sector continues to expand every year, and has typically shown vigorous growth from one holiday to the next, making Beijing's push to get more cars on the road largely superfluous.

Rather than focusing on personal vehicles and drivers traveling for pleasure, most of whom are not very sensitive to toll fees to begin with, the government should instead grant more commercial vehicles free access to China's highways year round. Over the past year, constantly rising logistics and transportation fees have been battering the country's businesses, and normal consumers have largely been left shouldering the burden of these increased expenses. If Beijing really wants to spur consumer spending, it seems that making it less costly for businesses to get goods to the market would be a better move than giving car owners a break on tolls.