BEIJING - Even as it grapples with the basic problems of building a modern auto industry, China is looking ahead to the day when it can begin exporting its own locally developed vehicles to the world.
There is no doubt of its intent:
'China is trying to design a car for this market, but not just exclusively for this market. A car designed by China for China, but not just for China,' said Xie Penghong, deputy director of the Department of Automotive Industry at China's Ministry of Machinery Industry, in an interview.
'The government has given a lot of thought to this project.'
At first glance, another major car-exporting nation is the last thing the world auto industry needs. Overcapacity is already a global problem.
On the other hand, analysts caution that China's quality and efficiency are so far below world-class levels that it will be decades before China emerges as a competitor in export markets.
With an eye toward speeding up the process, Xie said there could be a role for foreign carmakers in developing a China car.
'In the future, we're looking also to joint designing, joint development and joint production,' he said. 'When we talk about 'self-designing,' we don't exclude (working with foreign companies). We also talk about borrowing foreign brains and expertise and technologies. But we will be controlling the venture, the market plans, the blueprint on the last draft.'
China has made technology transfer a key condition for granting approval to foreigners that want to build cars and trucks here.
For example, General Motors recently opened an engineering and design center, modeled after Lotus, as part of its new venture in Shanghai to build Buick sedans. And Britain and China have signed a bilateral memo of understanding on automotive technology transfers.
EVEN MORE OVERCAPACITY
If realized, China's plans clearly could exacerbate the world's oversupply of vehicles. Even within Asia, where demand is rising rapidly, overcapacity looms.
According to an analysis by London-based DRI/McGraw-Hill, capacity utilization in the developing nations of Asia - excluding Japan and Korea - will drop from 67 percent in 1995 to 57 percent in 2000. Much of that excess factory capacity likely will be turned to exports.
But to where?
'I don't know where they would export Chinese vehicles,' said Tim Dunne, an analyst with Bangkok-based consultant Automotive Resources Asia Ltd.
Chinese quality is not good enough for the three largest markets of Europe, North America and Japan. Indeed, the quality of vehicles now built in Thailand and Malaysia is 'much better' than what China turns out, Dunne said.
Even if Chinese quality rose sharply, 'Southeast Asia would block any imports from China,' he said.
With Brazil-led Latin America also protectionist, only Africa and the Mideast remain as possible markets for Chinese cars, unless China can raise its quality in a hurry.
That will not stop China.
'It will be normal for Chinese plants that have learned foreign technology and foreign expertise to produce the same type of cars and sell them in international export markets,' said Xie.
'It would be extremely unfair for Chinese companies to produce only outmoded autos and sell them in the domestic market.'