A highlight of the endeavors is the restructuring of a total of 14 local enterprises currently engaged in the scrap vehicle disassembling business into four bigger and stronger multi-invested companies as a key footing for the healthy growth of the local junk automobile market, officials said.

"The restructuring has surfaced as a must given the present enterprises' small operation size and backward facilities, technologies and management level," said Yao Xinggang, an official at the Trade and Market Department under the Shanghai Municipal Economic Commission, overseer of local economic activities.

In China, automobiles are expected to be taken out of service after a certain time, which is set at 15 years for non-commercial vehicles with less than nine seats. Such junk vehicles are supposed to be disassembled and then treated, mostly as scrap steel and iron, by specified enterprises.

Tempted by huge profits, some dealers buy such scrap vehicles or parts and sell them again after some rough reconditioning or assembling, regardless their severe threat to users' safety.

In Shanghai, a city that has more than 1 million vehicles, about 11,000 automobiles on average are sent to the scrap heap every year. Among these, insiders say, about 10 per cent somehow enter the illegal junk vehicle assembling market.

"Although the situation is fairly good in Shanghai, we have to intensify our efforts to ensure a totally clean auto market," said Yao.

According to the city government's plan, a citywide information network platform is to be established soon, which is expected to help track the whole treatment process of every local junk vehicle, thereby minimizing the possibility for the automobile to re-enter the market.

Yao's commission has also teamed up with Shanghai Jiao Tong University to conduct a research project.

The project aims to probe the local prospect of setting up a modern used-vehicle treatment model, based on updated management expertise, facilities and technologies.

Described by Yao as a "pioneering work," the project is due to be completed early next year, providing a pilot model for involved enterprises to follow in terms of scrap-vehicle disassembling and comprehensive use.

A clean junk vehicle treatment market will, in the long run, boost the local second-hand car market, given local residents' growing desire for modern mobility, analysts said.

Official statistics indicate that more than 53,900 second-hand vehicles were sold in Shanghai in the first half of the year at 2.7 billion yuan (US$326.5 million).

(China Daily August 22, 2002)