‘Auntie’ Wang Xiuxia makes a million from car number plates scam in congested Beijing

As far as rackets are concerned, it was a master stroke – but now, finally, the law has caught up with Auntie Wang Xiuxia, who made nearly £1m by allowing her customers to circumvent Beijing’s stringent traffic laws.

For the past eight years, authorities in the Chinese capital have limited the number of car number plates, and therefore also cars, in an attempt to combat Beijing’s chronic smog problem.

But for the retired Auntie Wang, the opportunity was too good to pass up. In 2005, just before the restrictions were introduced, she bought as many as 1,000 plates and, when the ban was implemented, began leasing them to drivers. Though obviously illegal, the scam is believed to have netted her almost £1m over the past eight years.

Auntie Wang, a native of Tianjin, was only exposed after one of her customers was involved in a hit-and-run accident. The number plate was in her name, leading to uncomfortable questions from the police.

Officials from the vehicle management department in Beijing’s traffic bureau say all plates in her name have been now revoked, bringing to an end her enterprising project, according to The People’s Daily newspaper.

“I rented the number plate from Wang Xiuxia… at 10,000 yuan (£1,050) and signed a deal to use it for life,” one unnamed driver told local media.

There were more than 13 million cars sold in China last year. Four major cities, including Beijing and Shanghai, already have restrictions on the purchase of cars, using lotteries and auctions to allocate plates.

In Beijing alone, the number of vehicles has risen to 5.18 million from 3.13 million in early 2008. But to register your car you need a number plate, and to get that you need to enter the lucky draw. Each month 20,000 winners are picked.

While irritating for would-be drivers, it is easy to sympathise with the restrictions. Chinese cities are among the most polluted in the world, choking in smog for days on end throughout the year. Air pollution is chiefly a result of China’s heavy reliance on the use of coal-fired power stations, but the rise in the number of private cars has also contributed to the problem.

Tian Jun, a Beijing lawyer, said that constantly changing vehicle licensing laws in Beijing may have made it possible for people to buy up number plates and rent them out.

Before March 2005, only people who had a precious Beijing “hukou” or residence permit were allowed to buy the plates in the capital. Many people from outside the city who wanted to drive in the capital asked residents if they would register cars in their names.

After March 2005, this restriction was abolished and it became legal to buy a number plate with an ID card and a temporary residence card.However, this period only lasted until August 2006, when the government began to worry that the skies might be smoggy for the Olympics two years later, and announced the “strengthening on the management of motor vehicles registration”.

This new rule required all cars had to be registered under the owner’s real name, and if it was found that skullduggery was involved and an alter ego had been used, they would be transferred within three months.

With constant and confusing changes, Auntie Wang spotted a gap in the market, and bought a glut of plates on the cheap. By 2010, when the lottery began, business was booming, until, that is, her scam was exposed.