There are some pretty bullish forecasts for the Chinese vehicle market around and itâs perhaps interesting to reflect on some of the wider development issues facing that country. The fact that China is becoming a force on the international stage is simply inevitable, due to the countryâs growing economic clout. President Bush made it pretty clear yesterday that he doesnât want to rock Beijingâs boat in the run-up to the Olympics. But just as Chinaâs economy grows, the countryâs political development â both internally and in its external relations â will inevitably come under greater scrutiny, from international organisations, foreign governments, NGOs and lobby groups of all sorts.
I didnât realise that the Chinese did much business with Sudan until this week and, fair play to Mr Spielberg, he very effectively drew attention to some moral issues connected with that. The Chinese, as we know, are big defenders of governments being allowed to do what they like inside their own borders. The reason for that is that they do not want interference in their own affairs from âoverseas meddlersâ.
China is a one-party state, not a liberal democracy, though the Communist tag is now a bit misleading to say the least. There are still five-year plans and the role of the state is huge (though declining), but China is perhaps better summed up as kind of state-directed capitalist autocracy. Western-style democracy threatens to undermine one-party control and Chinaâs elite is generally very wary of any steps that would take China down that road.
They have seen the Soviet Union break up and are focussed on China becoming a regional superpower in Asia (displacing Japan) and also a much bigger player on the international stage where that suits Chinese interests. Itâs a unitary, statist model, with some devolvement of authority to big regional interests â thatâs a kind of pressure valve, but itâs not Western-style democracy by any means. People get richer and thatâs what many people want, food in the belly and a refrigerator in the kitchen, a TV and, yes, maybe a car.
But, and here are a couple of rubs. How widely are the benefits of economic development being spread? Is there a huge underclass of disaffected people being created? And also, for the rapidly growing middle class, are they going to want the kinds of freedoms they increasingly come into contact with elsewhere in the world? Is a free trade union movement going to develop? Could the economy yet turn to custard under political pressures?
The run-up to the Beijing Olympics is sure to see some more controversy, the Chinese government awkwardly responding to any outside criticisms, perhaps stamping on any internal dissent.
I guess many in the West would like China to grow but stay very stable. And that means keeping it much as it is.
Anyway, as far as the car market goes, there are forecasts that it could grow as far as 15m units by 2015. Iâm seeing some guys at JD Power Automotive Forecasting in Oxford later today so Iâll be sure to ask them about their latest thinking. If you want an entertaining read, try Mark Bursaâs latest article for us on Geely (pronounced jeeley). He has some observations on âChinglishâ. But Geely does sound like a company with a plan that is going places. And the emergence of the smaller independent OEMs like Geely, Great Wall and BYD in such a short space of time is pretty amazing.
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The Detroit automakers aren’t the only ones feeling the cost crunch in Canada. The London Free Press reports our neighbor to the north is also the most expensive place Toyota assembles vehicles– in spite of a distinct lack of Canadian Auto Workers’ union members. And yet, in spite of higher operating costs, ToMoCo may be looking to expand their RAV-4-producing Woodstock assembly plant even before it opens next fall. Toyota’s playing down the rumored expansion. They’re declaring that the plant must first open and perform before they’ll consider adding more capacity. When asked why they’d consider spending more on a plant that already costs so much to operate, Toyota Canada’s president Yoichi Tomihara replied “Toyota’s philosophy is to make the investment in the long term, not the short term.” Toyota executives also said they don’t let current market conditions sway their strategy; economic conditions can change. Besides, they added, they like making vehicles in Canada. I’m thinking ToMoCo likes it anywhere where they don’t have to deal with a labor union.
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