According to Ms. Tang's report, "the automobile industry, a key sector in China's industrialization and modernization efforts, has been developing rapidly since the 1990s. In recent years, China has become the world's fastes growing automotive producer. Annula vehicle output has increased from less than 2 million vehicles in the late 1990s to 9.5 million in 2008. In terms of production volume in 2008, China has surpassed Korea, France, Germany, and the United States, trailing only Japan. A disproportionate share of China's output was heavy vehicles in the 1990s. However, since 2000 China's growth has been led by an increase in passenger cars, which now account for more than 65% of its vehicle production."

Despite the global economic dowturn, China's automobile industry has continued to expand. More than 10 million vehicles were sold in China from January to October 2009. China is on its way to become the world's largest auto market if such growth continues.

As disclosed by Ms. Tang's report, "unlike Korea or Japan, China's automobile industry has been developed extensively through foreign direct investment. This invest ment has come in the form of alliances and joint ventures between international automobile manufacturers and Chinese partners. The international automobile manufacturers are unlikely to promote Chinese exports that compete with their own products in other markets. As a consequence, the Chinese companies that have expressed a strong interest in exporting cars have not had strong ties to foreign car producers and that, consequently, may struggle to meet safety and emission standards in undustrialized countries. However, if independent producers, such as Geely, can achieve much higher standards, they could prove to be a strong international competitor. Ford's proposed sale of Volvo to Geely may help the Chinese company improve its products."

To read the entire article from the Congressional Research Service, link here:

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