Can China be trusted with foreign car companies?

Buick Excelle GT

The Buick Excelle GT, based on the same platform as the Chevrolet Cruze, is part of the popular-in-China Buick line. Reportedly, the Excelle, perhaps with another name, will come to America.

It seems everyone wants a piece of the Chinese automotive market, and China seems willing to give it to them. But can China be trusted as a player in the global free market when, as a military dictatorship, it girds for war, arming itself with weapons designed specifically to counter U.S. military resources?

Selling cars in China is tempting, as one eyes a market 1.4 billion (that’s billion with a “b”) people.  Indeed, reports say that China’s car imports doubled in 2010. However, relatively speaking, that’s peanuts and the percentage increase the effect of small numbers. The hard figures  are that China imported 813,600 cars and light trucks in 2010. In 2007, Toyota sold almost 500,000 Camrys in the U.S. And according to the trade publication Automotive News, In just the first six months of 2011, overall vehicle sales in China totaled 6,343,396.

China isn’t buying cars in any real numbers built anywhere except China. Instead, China requires foreign manufacturers to build cars in China in joint ventures with a Chinese partner, but only with government approval.

As a result, non-Chinese car manufacturers have become significantly entangled with Chinese partners. For example, there’s Shanghai GM. It’s a joint venture between GM and Shanghai Automotive Industry Corp. Group (SAIC) and builds, imports and sells a range of Buick, Cadillac and Chevrolet models…but mostly the former.  In 2010, Shanghai GM became China’s first passenger car maker to sell 1 million vehicles in a single year.

And GM isn’t the largest. Volkswagen leads with 13 percent of the market. Ford, of course, sold Volvo to a Chinese auto company. But every major player has something going on in China, and for the most part, it’s not selling cars made elsewhere in the People’s Republic of China.

So what does this have to do with China’s military development? Certainly no one denies a country the ability to defend itself and its interests. However, a country that develops weapons explicitly designed to attack another’s resources falls somewhere short of a trusted ally. An EMP (electro-magnetic pulse) weapon–an atomic warhead configured to produce a massive electro-magnetic pulse that will disable any non-shielded electronics–in two formats are reputed to be in China’s arsenal. “There is…evidence that China is developing, or has already developed, super-EMP nuclear weapons that generate extraordinarily powerful EMP fields, based partly on design information stolen from the United States,” Mr. Pry, president of the group EMPact America, told the Washington Post in an email.

The question, of course, is what does one do about it? Obviously, one protects one’s military assets with shielding to defend as much as possible an EMP is it were to happen, and also develop the “Star Wars”-type technology to prevent the EMP weapon being detonated if launched.

But indeed, how far does one go in sleeping with the enemy. Much of our manufacturing base has been shipped out of the country and China now owns enough of the U.S. debt to bring the country to its knees, if it wished to do so. But does the auto industry participate in building China’s auto industry? And if so, who benefits and who loses?

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