Reference no: EM13523255

On the Edge: The Auto Companies in China

In 2000, Chinas car market began to expand dramatically due to the increasing wealth of the country, the encouragement of the government, and a growing middle class that wanted the comfort, convenience, and pride of car ownership. In 2003, car sales in China grew 80 percent to more than 4 million cars. With a population of 1.2 billion people and double- digit growth rates, China estimated that by 2035 as many as 300 million cars would be traveling on its highways. Foreign car companies eagerly flocked to help China expand its car industry, including Volkswagen, General Motors, Honda, Toyota, Ford, Citroen, and BMW, who together committed to invest $ 18 billion to grow Chinas auto industry. Critics suggested, however, that the overzealous auto companies unwittingly might be inflicting serious harms on the global environment. To begin with, the pollution from so many new cars promised to have extremely severe environmental impacts. Even clean cars will generate massive amounts of carbon dioxide as they burn fuel, thus significantly worsening the greenhouse effect. Cars also produce smog and other health hazards ( tuberculosis cases will double; emphysema and lung cancers will rise), and Chinas form of gasoline contains lead, a toxic metal. Expanding Chinas car production will also increase oil consumption, placing heavy pressures on the worlds dwindling oil resources. By 2004, Chinas rising oil consumption already had led to record- high oil prices, over $ 42 a barrel. If car ownership in China continues to rise, by 2020 Chinas oil consumption will be two thirds of the United States ( the U. S. consumes one- fourth of the worlds oil), a level the worlds oil supplies perhaps cannot support. Some experts claim world oil production will peak around 2010, leaving declining oil supplies to meet the rising demands of China, the United States, and the rest of the industrialized world, and creating economic havoc and political or military conflicts.

1. Is it wrong for the car companies to help China expand its auto industry?