Chinese government squeeze play

In a dose of cold reality for those on the left who so admire the Chinese communist system, the Chinese government appears ready to put the squeeze on their rapidly expanding domestic auto industry, with ominous portents for automakers. The New York Times reports that, after a decade of breakneck capacity expansion, high-ranking economic and environmental ministers are signaling that producers must now cut production to help reduce congestion, pollution and foreign oil dependence. Auto makers around the world, including GM and Ford, have invested heavily in new plants and expanded capacity in the Chinese market, and the government has until now encouraged buyers with subsidies and tax incentives.  According to the Times account, Chinese auto production has increased from less then two million cars in 2000 to 17 million today and an estimated 31 million vehicles by 2013.  By comparison, U.S. domestic auto sales are currently running at an annual rate of about 12 million...(Read Full Post)