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Many major car companies are shifting their attitudes from viewing China purely as an untapped sales market but also as an important manufacturing, outsourcing, exporting and regional research base. Such a mood swing has been highlighted by the efforts made by the country at the Shanghai Automobile and Technology Exhibition, which opened to the public on Sunday.

Rick Wagoner, CEO of General Motors (GM), announced in Shanghai that the company would double its production capacity in China by 2010.

Business insiders revealed that this trend would widen, as the country's low-labor cost and skilled workforce would become increasingly attractive to auto makers.

Ford China chairman Cheng Meiwei, told Xinhua at the exhibition that Ford was making China its major global outsourcing center, and that China-made spare parts would be dispatched to Ford vehicle assembly lines worldwide.

The GM's Chevrolet sedans follow Ford's example in using many spare parts from China for their US cars.

Customs statistics place at US$11.5 billion the amount of automotive spare parts, accessories and auto bodies exported by China in 2006, standing at four billion dollars higher than industry imports and creating the nation's first-ever surplus in this trade sector.

However, the move to China has come westwards as well as eastwards. Japan's Honda has already set up a sedan production center in Guangzhou to replace its former Japan factory. The Guangzhou branch will be tasked with manufacturing Honda cars for sales in Europe.

Yin Tongyao, general manager of China's domestic auto maker Chery, gave a domestic perspective by revealing that several multinationals desired to use Chery factories to manufacture their own cars for sales abroad.

However, should one gain the impression that China only serves the purpose of a manufacturing powerhouse, one of the exhibits at the Shanghai car show will burst this bubble. A new Buick GM concept car appeared at the show, having been the brain-child of US and Chinese staff at a joint technology center headed up by GM's US and China wings. 

(Xinhua News Agency April 23, 2007)