Chinese car influx likely a long way off
date: November 14, 2007
SOURCE:The Detroit News
By: Christine Tierney
DETROIT -- A long-anticipated
influx of Chinese-built cars to the United States
is not likely to occur soon, China's
top diplomat in Washington
said Tuesday.
Zhou Wenzhong said China's
fledgling automakers lack the production capacity to export big numbers of cars
to the United States.
"The notion of Chinese cars flooding the U.S. market is not a real notion at the
moment," Zhou, the Chinese ambassador to the United States, said in a
question-and-answer session following a speech to the Detroit Economic Club.
"They don't have the capacity."
Internal Chinese demand for vehicles is growing rapidly, due
to the economy's brisk growth rate averaging close to 10 percent a year in
recent years, Zhou said. For a time, China's automakers will have their
hands full trying to meet growing demand at home.
Last year, China
overtook Japan
to become the world's second-largest vehicle market.
A few Chinese automakers now export vehicles, mostly to
emerging markets in the Middle East and Africa.
Several Chinese automakers, including Chery Automobile Co.,
plan to stage exhibits at the North American International Auto Show in Detroit in January. But
in the past two years, Chinese manufacturers have been pushing back the dates
they expect to start exporting to the United States.
Newly-private Chrysler LLC recently concluded an agreement
with Chery to obtain Chinese-built subcompacts to sell in the United States
and other countries. But Chrysler officials said last month that Chery does not
have a vehicle that meets their requirements.
Zhou, who was meeting with top Detroit
auto executives during his visit to the area, alluded to the industry's
difficulties when he said, "At the moment, they need to worry about things
other than China."
Zhou recalled a prior visit to Detroit in 1996, when he was part of a
delegation signing off on a venture between General Motors Corp. and Shanghai
Automotive Industry Corp. Through their joint ventures, GM is the
second-largest global automaker in the Chinese market after Volkswagen AG.
"When we work together, we'll be able to turn it into a
win-win relationship," Zhou said, urging goodwill and cooperation between
the United States and China to resolve
their trade issues.
The United States
had a $232.5 billion trade deficit with China last year -- its biggest
shortfall with any country. Americans say China's undervalued currency is a
major factor in the trade imbalance.
Part of the deficit also reflects moves by U.S. manufacturers to shift production offshore,
to China
and other low-wage countries, to cut costs.
Zhou said the Chinese government was concerned about the
trade imbalance and would work vigorously to reduce it. "We must boost
domestic demand," he said, "particularly consumer demand."
As China's
economy expands, wages and costs in China
are rising, and soon some manufacturing will shift out of China to even lower-cost countries, such as Sri Lanka or Bangladesh, Zhou predicted.
Production is unlikely to return to high-wage regions.
"To produce these things here," he said, meaning the United States,
"will not be economical. That's the simple truth."