Last January, the municipality of Beijing imposed a monthly limit of 20,000 new car registrations, a draconian policy that reduced car sales by 70 percent.

The central China city of Guiyang enacted a similar measure in July, and two southern cities, Guangzhou and Shenzhen, may follow suit.

This could trigger an industry shakeout. Early this year, Credit Suisse warned that car sales in China might plunge as much as 17 percent if other Chinese cities adopted similar curbs on car ownership.

Car dealers also will suffer. The China Automobile Dealers Association has predicted that Beijing's sales caps could drive up to 20 percent of the city's new-car dealers out of business.

But it has become impossible to ignore the social cost of China's fast-growing auto industry.

This year, I traveled to major cities in southwest, northern and southern China. Stepping out of the plane, I immediately saw that they all had one thing in common - smog.

My impressions were confirmed this month by a report released by the China Academy of Social Sciences, a government-affiliated think-tank.

According to the academy's report, one-third of China's large and medium-sized cities have poor air quality, and motor vehicles are a major cause.

Sixty-six percent of the nitrogen oxide -- a key element of smog -- found in the atmosphere in China's cities comes from vehicle exhaust, the report estimates.

Ninety percent of volatile organic compounds and 26 percent of breathable particulates come from vehicle exhaust.

Traffic congestion

At least smog can be temporarily swept away during windy days, but traffic congestion afflicts urban residents every day.

Two-thirds of Chinese cities suffer serious traffic jams during rush hour, according to the report. And in major cities like Beijing and Guangzhou, main streets are clogged with traffic most of the day.

In the past, traffic congestion was mostly confined to cities along China's prosperous coast. Now, gridlock has spread to cities in China's interior.

Twice this year, I visited the southwest China city of Chengdu. On both occasions, I became stuck in the city's traffic. In retrospect, it wasn't a big surprise; every day more than 1,000 vehicles are added to Chengdu's fleet.

China's large cities are victims of their own prosperity. In Beijing, 60 percent of families owned cars last year, significantly higher than the national average of 15 percent, according to the report.

That's why Beijing has the worst air quality and the most congested streets of any city in China.

China's government must take measures to fix these problems. The government should consider a mix of tougher emission standards, higher fuel taxes and more public transport facilities such as subways or elevated highways.

Delay is not an option. The government must take action now.