China uses Arabic numerals at times. For example, the current year in Chinese is 二零二三 but it’s often going to be written 2023. Prices are pretty much always in Arabic numerals (eg 25元). Using Arabic numerals on a license plate for simplicity (instead of allowing thousands of characters) makes sense and is easy to read for people.
Latin letters are used less often (in most cases, Chinese characters are used even to write foreign words) but most people know the letters because pinyin is used to enter Chinese on a keyboard (and just for showing pronunciation in general). For example, 北京 is Beijing.
By the way, Chinese license plates also include a single Chinese character on the left indicating the province. This is accompanied by a letter indicating the city, with A usually being the capital city. These characters are interesting because they are often traditional names for the region. For example, Hunan is 湘 xiang (also the name for Hunan cuisine, 湘菜) and Guangdong is 粵 yue (which is also Cantonese cuisine).
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