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Park your expectations

China's motor industry is growing faster than anywhere in the world, with car sales up 72 per cent in the first quarter of 2010.

Words like outrageous and surprising and confronting and confounding also work.

It's almost impossible for an Australian to relate to a Chinese population of 1.3 billion people, a single city - Shanghai, the commercial hub - with a population close to the 23 million in our whole country, and a motor industry growing faster than anywhere in the world.

In the first quarter of 2010, car sales in China have jumped by 72 per cent. In just three months there were more than 4.7 million deliveries and the full-year total could be more than 18 million, which is better than the rate Americans bought new vehicles before the Global Economic Crisis. China is now easily the biggest builder and consumer of new cars and anyone who thinks - or hopes - there will be little impact in Australia is kidding themselves.

Less than five years ago there was little talk of Chinese exports because demand at home was far greater than the motor industry's ability to deliver. But Chinese carmakers - there are 47 in total, with 21 independents and 26 joint ventures with companies as diverse as Volkswagen, General Motors and Suzuki - are now hinting at around five million cars of excess production capacity within five years.

That means Chinese cars will come, and it will not just be the Great Wall, Geely and Chery brands already committed to sales in Australia this year.

"The pace of this place is extreme. Park your expectations," says Chris Wright of Austrade, speaking in Shanghai this week. He knows a vast amount about China, as he first came to the country in 1980, and says the ultra-fast development of the car industry is a reflection of everything else happening there. Wright says moving people off farms and into cities, where they will work in low-cost factories, is a good way to see what is happening.

"They are moving 500,000 people. They are greating a new city the size of Brisbane every month," he says. "It's being done faster than every before and on a scale never seen before. Park your expectations."

He says the rate of change in technology is also extreme, because China is starting from scratch in so many areas. So the country has almost entirely jumped the landline era in telephone communication, moving straight to mobiles. "There are 500 million mobile phones in China," Wright says.

He's unwilling to make firm predictions on the car world, either inside China or on the export front, but says his experience over 30 years points to long-term sustainable growth at a rate which means China will quickly become the biggest in the world at almost everything.

"We're not seeing something sudden here. It is long-term, sustained, planned growth. Think of eight per cent growth, every year for 30 years, and predictions of the same into the forseeable future.

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