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The city will allow 240,000 passenger cars to be registered next year through a license plate lottery system, city government officials told reporters.
The figure is about one-third of the number of new cars registered in the capital this year. The new rules take effect on Friday.
But authorities admitted that the registration cap along with other measures such as higher parking fees in the city centre and stricter enforcement of traffic rules would not automatically ease the chronic gridlock.
"It will be difficult to dramatically improve the traffic situation in a short time," said Li Shaoming, deputy director of the Beijing Traffic Management Bureau.
"But it can slow down the pace of worsening traffic congestion."
Expectations that the government was going to restrict the number of new number plates issued next year sparked a surge in car sales this month, with more than 20,000 cars sold in the first week of December, state media said.
That was more than double the 9,000 cars sold in the same period last year.
Beijing's air is among the most polluted in the world, and the problem is getting worse amid high demand for private vehicles from its increasingly affluent residents.
The number of registered cars in Beijing stood at 4.8 million on Thursday with 750,000 new cars hitting the streets this year, officials said.
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