China Overtakes U.S. as the World's Biggest Auto Market

Chinese auto sales and output both exceeded 13 million in 2009, overtaking the U.S. to become the world's biggest auto market.

The growth is attributed to a series of favorable government policies that have helped promote the development of the industry.

Chen Zhe has more.

Though the global financial crisis struck a blow to China's auto industry at the end of 2008, the Chinese government implemented a series of policies to boost its development.

Jia Xinguan is a well-known analyst in the auto industry.

"China's fiscal revenue grew as much as 8 percent in 2009. It serves as a driving force for the development of the auto market. Moreover, the central government has carried out favorable policies such as reducing vehicle purchase taxes, subsidizing car purchasing for rural areas and trading in old cars for news ones. This has boosted auto consumption."

In addition to the growth in auto sales and output, the Chinese auto industry also has also put a great deal of effort in developing cars with new energy and innovative technologies.

Dr. Zhao Fuquan is vice chairman of Geely Automobile Holdings Limited.

"We have set out to develop the third generation of electric cars, which combine the use of solar energy and electricity. They will be on display at the 2010 Beijing Auto Show."

Experts say with the per capita GDP surpassing 3,000 U.S. dollars in China, the auto market can expect a golden period of development in the future.

Yuan Yue is president of Horizon Research and Consultancy Corp, a renowned professional research and consultancy firm in China.

"Common Chinese households have begun purchasing cars. The process will last 50 to 60 years. It is at a different stage from the industrialized countries."

With strong consumer demand and continuing favorable policies, auto sales and output in China is expected to hit 15 million in 2010.

Chen Zhe, CRI News.