China and cars.

Author:Mugyenyi, Bianca
 
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Did you know GM sells more cars in China than in the US? In March, GM sold 230,048 vehicles in China and 188,011 in the US. The US auto giant is on pace to sell more than two million vehicles in China in 2010 and three million by 2015.

"Overall auto sales in China rose 56% in March from a year earlier to a monthly record of 1.74 million units," reported the Wall Street Journal. Total Chinese vehicle sales may hit 17 million in 2010, more than the biggest year ever in the US. China surpassed the US in auto sales in 2009, but that was largely because of a massive downturn in the American market.

Today a Beijing tourist is more likely to encounter a traffic jam than see the Forbidden City. In 2009 auto companies sold 13.6 million vehicles in China, 13 times the total number of cars in circulation in 1990.

Thirty years ago the Chinese Communist Party began to reform the country's state-dominated economy. State assets were sold, social entitlements cut, and consumerism unleashed. Capitalism was the new ideology. A decade on, the government discovered that this required an automotive sector centered around the personal car.

The Chinese government understands, in the words of the Economist, that "the car industry more or less invented modern industrial capitalism." Which is why, according to the Financial Times, "China's car-centered model of development has been a mainstay of economic growth in recent years. ... [T]he spin-off benefits from burgeoning car sales have been enormous. Each car requires several thousand parts, hundreds--if not thousands--of suppliers, roads, car parks, driving schools, petrol stations and other service industries."

For the past 75 years the automobile has been the number one source of capitalist profit. An industry with a voracious and varied appetite, automakers are among the leading consumers of copper, aluminum, plastics, iron, lead, rubber, textiles, vinyl, computer chips and steel. Nine of the world's 10 biggest corporations in 2007 were car and oil companies (Wal-Mart, the largest, is highly dependent on the private automobile).

The Communist Party has worked vigorously for China to join this capitalist heaven. In 1994, the auto industry was named one of five "pillar industries" by the government. To prop up this pillar, state banks have invested billions of dollars in car manufacturing. There are now automotive factories in almost all of China's 31 provinces, and last September, Wang Chuanfu, a "carmaker,"...

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