Let's take a closer look at the facts behind the increase in Chinese auto exports.
First, note that it is the number of exported vehicles - and not their total value - that now eclipses imports.
Of 170,000 vehicles exported from China in 2005, some 60% were trucks and lower-priced small cars. China sends its vehicles principally to developing nations in Africa, the Middle East and Southeast Asia.
In contrast, China imports higher-priced luxury models from Europe, Japan and America. As a result, the value of automobiles imported into China still represents more money than exported vehicles - even though the Beijing Times reports that the value of total imports rose just 8% in 2005.
Overall auto sales in China slowed in 2005, contributing to a glut of some 2 million unsold vehicles. This surplus has motivated China to focus on increasing its auto exports to the United States.
And The Winners Are...
China enjoys a competitive advantage over other countries, producing trucks and pick-up vehicles more cheaply in part due to lower labour costs.
Perhaps the biggest winner in exporting vehicles from China is Chery, a Chinese automaker with government sponsorship. Chery hopes to replicate overseas the high sales of its mini-compact QQ, which resembles Chevrolet's Spark model but costs 20% less.
The world's largest car manufacturers are keenly aware of China's robust growth in auto exports, and see a compelling opportunity to build cars in China. For example, DaimlerChryler has announced plans to set up an export joint venture in China for Chrysler products.
Honda was the first foreign car manufacturer with a Chinese operation dedicated to exports. Recently Honda launched another Chinese plant that will produce some 50,000 subcompact Jazz cars for Europe annually, replacing the version built in Japan.
Making the recent slowdown worse, don't count on the growth of auto imports into China.
This is somewhat surprising given that China, with a population of some 1.3 billion, had said that it would accelerate its purchases of vehicle made in other countries. Perhaps this bold statement was a ploy to give lip service to China's announcement that it was committed to World Trade Organization mandates by removing Chinese tariffs on auto imports by the end of 2006.
