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At the ongoing Boao Forum for Asia Annual Conference 2006, which is held in Boao, a scenic town in south China's Hainan Province, world auto manufacturers give their comments on China's auto industry at a session on Friday evening. They all believe that China has great potential and opportunities in this regard with its rapid economic development, but at the same time, some challenges to this country and the industry are obvious.

Following two decades of reform and opening up, China's economy has maintained a strong momentum, and along with it, China's auto market has also expanded significantly, said Hattori Etsuo, chief representative of Toyota Motor Corporation China Office.

In the foreseeable future, China's auto market will continue its robust and fast growth momentum along with its economy. By 2010, the sales volume will reach around 9 million units, said Etsuo.

However, Etsuo pointed out, the rapid growth of the auto market has also produced some negative impacts.

First of all there is a shortage of energy. China's dependency ratio on imported oil has exceeded 30 percent. The State Information Center has predicted that by 2010 China's dependency ratio on imported oil will grow to 44 percent.

He said that the oil consumption by vehicles in China account for 35 percent of the total and the figure will further grow to 43 percent by 2010.

"In order to ease oil shortage, the auto industry must face the challenges to reduce vehicle's energy consumption," he said.

Etsuo said that another problem brought along with China's rapid auto market development is air pollution, quoting figures from the State Information Center: the average percentage of air pollution caused by vehicles in urban area has increased to 79 percent in 2005.

Kevin Wale, president and managing director of General Motors China, forecast that every 1,000 people in China will own 100 cars by 2010, compared with the current 24.

"What is the next step in the development of China's automobile industry?" asked Wale.

"China has the opportunity to not only participate in but potentially lead the next-phase technological development in the automobile industry, particularly in the auto technological development and alternative fuel vehicles," he said.

He said alternative fuel vehicles will be in increasing demand in the international market. If China wants to play a leading role in the global auto industry, it needs not only to be an auto manufacturer, but also to be a leader in the application and innovation of automobile technology.

To achieve this, he said, China needs to encourage cooperation and partnership among different countries and between foreign and domestic companies.

"Partnership has served as a driving force for quality, reliability, safety and environmental protection and raise the level of the entire industry, including indigenous companies," said Wale. "By working together, China will reach a near-impossible task in the establishment of an advanced world-class automobile industry that is among global leaders in innovation, quality and cost," he added.

(China.org.cn by staff reporter Yuan Fang, April 22, 2006)