Business is actually booming for GM in China. Sales there for the first five months of this year rose by more than a third over the same period last year. Today, GM said its problems in the US will have no impact on its thriving operations in China. The World's China correspondent Mary Kay Magistad says the Chinese aren't too worried about GM's bankruptcy.
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LISA MULLINS: Actually, GM's business is booming in China. Sales there for the first five months of this year rose by more than a third over the same period last year. Today, GM said its problems in the United States will have no impact on its thriving operations in China. The World's China correspondent Mary Kay Magistad says the Chinese are not too worried about GM's bankruptcy.
MARY KAY MAGISTAD: GM has a big plant in Shanghai which is a joint venture with the Shanghai city government. The local government owns 50% of that, and so there isn't a lot of concern with GM facing the problems it's having. There's a fair bit of confidence that what is in Shanghai will continue, and there's even been some talk in the Chinese media about how the GM plant in Shanghai could soon be exporting GM cars to the United States.
MULLINS: Well, that would certainly present an opportunity to the Chinese automakers. Is there a feeling there that they can gain something on U.S. automakers in the wake of GM's filing for bankruptcy?
MAGISTAD: I think Asian auto makers in general, Chinese, Korean, and Japanese all see this as an opportunity. China has a couple of automakers, including a new one called BYD, which has made a very high performance battery. It's coming up with a hybrid car and it's hoping that that will be a big hit in the States, and for many of these Asian automakers, they are, you know, several steps ahead of the U.S. automakers when it comes to making fuel efficient cars.
MULLINS: Is that true? I mean, how... What was the impetus there for fuel efficiency and why are they ahead of the U.S.?
MAGISTAD: Well, in Japan they started in the 1970s making cars that got better mileage. They responded to the energy crisis of the early '70s while U.S. automakers really didn't.
MULLINS: And specifically with the Chinese, though, I mean, what was the impetus there to manufacture more fuel efficient cars?
MAGISTAD: I think they recognize that it's an economic opportunity, that this is something that consumers around the world want. It's also answering domestic demand and domestic problems in terms of trying to control emissions, recognizing that as more and more Chinese enter the middle-class, more and more Chinese are going to want cars. And if there are already the problems that exist now in China with auto emissions, you multiply that by several times over and it becomes a huge problem. So the Chinese government has been encouraging automakers around the country and they've also been encouraging research labs to look at ways of making batteries that are very high performance, finding ways of making cars, hybrid cars, that are either low on emissions or don't have emissions.
MULLINS: By the way, are they encouraging these car makers or mandating that they do these things?
MAGISTAD: There are already higher standards for how many miles per gallon that cars need to get in China compared to in the States. At this point, it's encouraging auto manufacturers to move toward hybrid vehicles, to move toward more fuel efficient vehicles.
MULLINS: All right. Thanks very much. The World's Mary Kay Magistad in Bejing. Thank you.
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