Beijing's monthly vehicle registration lottery broke a new record with over one million applicants competing for less than 20,000 permits in August.

The Chinese capital's notoriously congested streets prompted municipal authorities to implement a lottery system for vehicle registration permits back in January 2011 in an attempt to limit the number of drivers in the city which already has over 5 million cars causing gridlock along its avenues.

While the lottery system has been hailed by authorities as a success in curbing the city's ballooning traffic problems, it has been criticized for creating an underground market for the permits.

The permits are supposedly non-transferable to other parties, but reports have emerged that some people are able to purchase the permits on the black market for as much as 150,000 yuan ($23,600), according to the Daily Telegraph.

Authorities have neither confirmed nor acknowledged the existence of such a market, but Chinese state media outlets have published criticisms which point out that many recipients of the monthly registration awards have no intention of purchasing vehicles.

"The problem is that the real needs aren't being met, while people with little intention of buying cars are feeling compelled to enroll in the lottery," Yang Hongshan, deputy dean of the department of urban planning at Renmin University of China, told the China Daily.

The issue, in part, could simply be a matter of affordability with some Beijing residents getting permits in advance before they are even able to purchase a car.

Meanwhile, some residents are skirting the lottery altogether by applying for commuter permits in Hebei province, which surrounds Beijing.

In recent years, municipal authorities have implemented a number of other traffic restrictions, including increasing parking fees and the number of meters, adding stricter regulations to parking zones and expanding public transportation to discourage driving.

According to the UN Economic and Social Commission for Asia and the Pacific, city officials reported that the traffic-reduction initiatives increased the use of public transportation by 4 percent from January to March of 2011, and increased the use of commuter rail by 21 percent during that same period.

Travel speeds were also reported to have increased by an average of 17.4 miles per hour (28 kilometers per hour) during peak morning hours.

Nevertheless, as China's economy continues to rapidly expand, more and more citizens entering the middle class are purchasing cars and outpacing the capacity of existing infrastructure to accommodate the increase in vehicles on the streets of densely populated Chinese cities.

According to the Beijing Municipal Commission of Transport, the number of cars in Beijing more than quadrupled from 1 million in 1997 to 4.76 million in 2010.

Other Chinese cities have experienced similar traffic issues. Shanghai has responded by instituting an auction system for car permits -- a policy which undoubtedly gives an advantage to wealthier residents -- with some permits going for as much as 60,000 yuan ($9,460).