China Gets in Gear To Rev Up Car Production

CHINA plans to rev up motor-vehicle production in the next few years, even though traffic congestion, air pollution, inadequate energy supplies, and shrinking farmland pose roadblocks, Western analysts say.

The government hopes that automobiles, along with computers, petrochemicals, and telecommunications, will propel rapid economic growth in the next 20 years.

On Sept. 22, the government announced that it would subsidize private car purchases and streamline and consolidate China's 125 largely inefficient carmakers into four major production centers.

China now has 1.2 million passenger cars, most used for official or business purposes; only 5 percent are privately owned. But since market-style reforms were announced in 1979, car production has grown more than 15 percent yearly and is projected to reach 1.5 million autos a year by 2000.

A cornerstone of the new automotive policy, which calls for producing vehicles in cooperation with Volkswagen, Peugeot, and Daihatsu, is a compact sedan that will go into production by 1997 and is intended to become the middle class's family car. Ford, Chrysler, General Motors, and European and Japanese competitors also hope to contend for a share of the Chinese market.

Despite spreading conspicuous consumption among the middle class, owning a car priced at more than $5,000 either remains out of reach or is not yet needed in a society where car ownership has yet to capture the public's imagination. ``People around us don't want to buy cars because of the money and because we don't feel a need for a car,'' says Shi Yongzhi, a government engineer. ``In China, a car is still viewed as a waste of money.''

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