BEIJING—China is establishing an electronic identification system to track cars nationwide, according to records and people briefed on the matter, adding to a growing array of surveillance tools the government uses to monitor its citizens.

Under the plan being rolled out July 1, a radio-frequency identification chip for vehicle tracking will be installed on cars when they are registered. Compliance will be voluntary this year but will be made mandatory for new vehicles at the start of 2019, the people said.

Authorities have described the plan as a means to improve public security and to help ease worsening traffic congestion, documents show, a major concern in many Chinese cities partly because clogged roads contribute to air pollution.

But such a system, implemented in the world’s biggest automotive market, with sales of nearly 30 million vehicles a year, will also vastly expand China’s surveillance network, experts say. That network already includes widespread use of security cameras, facial recognition technology and internet monitoring.

“It’s all happening in the backdrop of this pretty authoritarian government,” said Ben Green, a fellow at Harvard University’s Berkman Klein Center for Internet and Society who is researching use of data and technology by city governments. “It’s really hard to imagine that the primary use case is not law enforcement surveillance and other forms of social control.”