The report says failures at the city government level are largely to blame for China's urban transport problems, including severe traffic congestion, air pollution and road accidents, and calls on the central government to step in and mandate changes before it is too late.
China is the world's fourth-largest automobile producer and third-largest consumer, with 16 million registered cars in 2004, up dramatically from just 1 million in 1994, said the report titled "China: Building Institutions for Sustainable Urban Transport."
The World Bank report said the rapid growth of the industry has left cities scrambling to accommodate the traffic and with little time for rational urban planning.
It also called on the central government to pressure local authorities to adopt energy-efficient vehicle technologies, use clean fuels, implement higher taxes on fuels and improve public transport.
Chinese cities need to urgently build up their bus and subway networks "before the critical mass of motorists is formed and shapes an irreversible, auto-dependent land use pattern," the report said.