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Banks and Auto Companies Warned of Market Trend

China's automobile production in the next five years is predicted to far surpass demand, and the government hopes banks and enterprises will correctly judge and respond to the market, said an official in Beijing Tuesday.

Zhang Xiaoqiang, secretary-general of China's National Development and Reform Commission, told the first annual meeting of the US-China Business Dialogue that China was expected to become the world's second biggest auto market with a predicted demand of 6 million by 2007.

However, he said, if present and planned auto production capacity was realized by that time, the output of automobiles would reach 15 million, triggering a "misfortune" for China's banking and auto manufacturers if the output far surpassed the demand.

The output of automobiles in 2002 reached 3.25 billion, 30.8 percent more than 2001, with the output of cars increasing 55 percent, he said.


Zhang said the output of automobiles would surpass 4 billion, up 20 percent this year.


The US-China Business Dialogue was set up Tuesday by the China Council for the Promotion of International Trade and the US Chamber of Commerce. Annual meetings will be held in China and the United States by turn.


(Xinhua News Agency October 15, 2003)

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