China became the world's largest auto market in 2009 and reports predict the emerging markets of China, India and Brazil will lead global auto sales in 2010. Foreign auto makers such as GM, Ford, VW, BMW and Toyota have all been increasing their output capacity (esp. their luxury brands)in preparation for the growing Chinese market. Additionally, over the last year, Chinese domestic auto makers are acquiring foreign brands and technology to bolster their own capabilities. In 2010, as foreign auto makers target a luxury auto market in China, Chinese auto makers will likely make push into overseas markets for economy and green cars.

China's Push to go Green

China gets a lot of criticism for being the largest greenhouse gas emitter in the world (United States is second). However, few people know that China is also the world leader in the growth of its renewable energy sector. China hopes to generate 30% of its energy consumption from renewable resources by 2050. This push can been seen in a variety of different governmental measures.

First, Chinese government recently consolidated the energy industry and are pushing for the increase of hydro-electric, wind, solar and nuclear energy plants. China is in the mist of developing a wind farm with the potential for 40GW of power output. In fact the project is so large that is deemed the Three Gorges of the Land. China is also planning on starting construction on 10 new nuclear power plants each year to increase the power output.

Second, China is providing numerous incentives for firms with green energy technology. These incentives take form in tax breaks, lowered capital requirements, subsidies and other preferential treatments. The auto industry is where these incentives are most evident. Auto makers, both domestic and foreign, are encouraged to develop alternative energy cars.

Lastly, China is pushing its domestic industry to decrease pollution. Many of the environmental rules but in place for the Beijing Olympics are being phased in to become permanent. China has set tighter regulations on maximum emissions from coal power plants and close down many of the non-efficient ones.

China is in many ways still a developing country, so it is going to pollute heavily. However, it is encouraging to see that it is taking a step in the right direction. Also the opportunities for firms involved in renewable energy is endless and should consider China a great market.