Confluence of Car Crud.(Column)

Byline: Dutch Mandel

Someone said that to make money in the stock market requires knowledge, insight and the ability to see trends and capitalize on their convergence. I hope I did not witness the redistribution of guns and butter.

Shanghai, China. This country is enjoying phenomenal growth, and embraces capitalism in a bright red world of communism. (As a primer to going there, I read Thomas L. Friedman's The World Is Flat-A Brief History of the Twenty-First Century. This book is a wake-up call, and it should be on everyone's nightstand, particularly those in the car business.) China consumes raw materials at a prodigious rate; steel, concrete, lumber and oil is shipped in to satisfy the growing wants of a transmogrifying society. Millionaires are popping up all over-China had the sixth-fastest growth rate in the world in 2004 for the number of high net-worth individuals, those with at least $1 million in assets excluding home real estate value.

Throw in China's incredible ability to manufacture about anything for pennies on the yuan, its growing international political clout and our insatiable hunger for goods, and there is a tumultuous swirl of power redistribution on the horizon. And let's not forget that we want in on China's skyrocketing growth-and cheap labor-for our own good.

Our interpreter, a woman of 25 with impeccable English, has her own marketing company after working with several multinational fashion houses. Though General Motors has a significant presence in China, this woman is saving for a "real car, a BMW.''

At a meeting with the Toyota executive in charge of China business, the man is asked about Toyota's joint-venture operations with the Chinese. Does he realize they are taking Toyota's technology for their own, whether they pay for it or not? "We must understand the relationship,'' he says: When is it pirating and when is it teaching? Soon he will compete head to head with the ...