A changing landscape of road traffic liability in China: A view from law and economics

China, like many other middle-income countries, is currently undergoing rapid motorization and urbanization. As a side effect, thousands of people lose their lives and are injured each year in road traffic crashes. This has made China one of the world’s most dangerous countries to drive in. In order to improve safety on the road, the Chinese government has taken various efforts in the past decades. Even though all these efforts have been adopted for years, the effectiveness of them has not been analyzed in detail. This research fills this gap and evaluates all the efforts critically based on a law and economics analysis. Moreover, based upon such an analysis, this research also covers other issues, such as what should be done to reduce the amount of traffic fatalities and injuries, what should be done to improve safety on the road, as well as how to effectively compensate traffic victims and spread accident losses. The study of these issues provides useful insights to scholars, legislators, policy makers, insurance companies, traffic users, etc. Furthermore, based on these insights, this research proposes several concrete proposals to further prevention and to better compensation of traffic victims in China. These proposals could also be applied in other middle-income countries and elsewhere with similar traffic situations.