Traffic Economics

China's rise to an economic power

30 years ago China was a state torn apart by ideological battles, but since 1980 it has been sweeping towards the summits of the world economy. And in the process it has made great progress: Since the start of the transformation process into a "socialist market economy" the Chinese economy is amongst the fastest growing economies of the world which has registered an industrial growth of more than 10% annually for 20 years. In the car industry sector the units produced increased ten times. Inadequate general conditions are still posing a problem for foreign investors. The shortage of electricity for example has a negative influence on production in many places and water for the cooling of industrial plants has become rare in the meantime. This was witnessed also during the visit of TÜV Austria. Discussions with representatives of the car industry and inspections for type licensing procedures had to be held on Saturday and Sunday because on Tuesday electricity is switched off in the region and then production is at a standstill.

A booming car industry

Car production did not start in China before 1950 and has in the meantime developed into a prime example of the world's car industry. The reason for this was the immense backlog demand in the motorisation of the country. In 2003 some 4.4 million units were produced in China, this year the figure is expected to be 4.9 million. This represents 7% of the global car industry. Till 2010 the car production is estimated to reach 17 million units per year. Te international car industry will be pumping 10 billion Euros into the country till 2007. Experts are of the opinion that this might already be a little too late. The Volkswagen group, till now the uncontested leader in the field, lost 12% of its market share within three years and now stands at less than 30%. The winners are own Chinese brands such as Cherry which are now setting up distribution centres in the USA and Europe.

Bikes for Europe

One motive for TÜV Austria to offer its services in China is the large number of Chinese manufacturers of motorcycles which produce low-priced vehicles for the national market. European consumers have been showing interest in these affordable bikes. With their pleasantly styled mopeds, scooters and small capacity motor cycles the Chinese manufacturers want to appeal mainly to a young clientele. TÜV Austria with its know-how in the performance of the European type licensing procedure and its competency in the field of technical inspections is planning to help these producers to position themselves on the European market.

Tailwind through a dynamic economic development

Over the next 20 years China will be one of the countries with the biggest growth rate in the world. Industrial production is expected to increase every year by two-digit figures. At present the pillars of heavy industry - such as the car industry and shipbuilding - are growing very rapidly. With rising wages and salaries the demands of the Chinese consumers are also increasing. Therefore it is not surprising that private consumption increased by 8% over the last ten year. This trend is expected to continue in the coming years.

The challenge of stimulating domestic demand

For the majority of Chinese people, not only in the backward rural areas but also in the cities, private purchase power did not keep up with the rapid macroeconomic developments of the last two decades. Deng Xiaoping is quoted as saying "getting rich is wonderful". Now it is all about making this become real for the large masses. TÜV Austria with all its divisions considers this as a chance and a challenge to offer its more than 130 years of experience and competency as an inspection, monitoring and certification body also on this market.

Autor:
Dipl.-Ing.Walter Bussek