Effects of Chinese Auto Market on US Economy - Research Paper Example

  During the industrialization process of China, the automotive industry has grown rapidly. The growth of the automotive industry of China has become the catalyst for the growth of other sectors as well. The automotive industry of China has directed its attention towards the infrastructure development patterns (Zhang, 2003). The automobile industry of China is the major driver of the economy of the United States. This market has also played a vital role in the growth of other industrial economies.

When Henry Ford applied the technique of line production in order to produce cars, the product transformed from a luxury item to an essential component of life. The automotive industry of China has evolved as the major driving the economy of China and its workforce. Some of the arguments about Chinese automotive industry focus on the consumption of automobiles in the market of China and the export approach of the country. According to different indicators, China is open to the foreign investment like Korea and Japan.

These indicators also suggest that China may take a hybrid approach in order to direct its attention towards domestic consumption. At the same time, China may also build vehicles for export in order to produce world-class cars (Business Line, 2002) The automotive car industry of China is export-focused. The industry is very complex and is undergoing a transformation from low-cost to value-added products.   The global economic crises have severely influenced the automotive sector of the United States.

However, the auto industry of China is growing constantly. The industry has become a bright focus for foreign car manufacturers. In the year 2008, China produced approximately eight times more vehicles than those produced in the 1990s. The annual production of cars in the automotive industry has allowed China to surpass the United States. The vehicles produced in the automotive industry of China have become very sophisticated with the passage of time. It is because of the partnership of China with major automotive giants including Volkswagen, Toyota, Mazda, GM, Honda, and others.

The purpose of this partnership is to boost technological cooperation (Chang’An Automobile Group, 2002).