That figure equals overall annual car production in the world so Monday's decision by China's State Development Planning Commission to relax pricing controls on domestic cars will provide a further boost to a market that will very likely outstrip the rest of the world one day. The decision to relax controls comes in the wake of China's imminent entry to the World Trade Organization, which requires Beijing to liberalize its auto sector. With an increasingly affluent middle-class the market's potential for growth is huge.
China is the largest developing market in the world in terms of untapped demand for cars.
China's Shanghai Automotive Industry Corp. China has been a closed market for years, with its domestic automotive industry well protected by government policies, but as part of its efforts to join the WTO, Beijing promised to pull down the wall of protection that has until now shielded its carmakers. Within six years of entry, China must scale back tariffs to 25 percent and get rid of import quotas. As a result, competition among global carmakers is expected to get white hot and the choices for Chinese car buyers will mushroom. Under WTO regulations, the highly fragmented and protected domestic market will open up internationally. Soon, Chinese buyers will be able also to choose from advanced technologies and a wide range of products.