Chinese stimulus package trades bikes for cars #auto #bicycles

Economic stimulus packages are all the rage right now - imagine what could have been achieved with a similar global effort on global warming, instead of the lukewarm drip-fed effort we have seen so far? Anyway, the financial collapse threatens economies, and thus jobs, which would be of immediate harm to most incumbent governments... so what hurts most gets most attention.

In China's case the stimulus package includes support for car makers, effectively tying the consolidation of the industry to an economic imperative - to drive local growth by swapping bicycles and the like for locally-made cars. Now this is great for the car makers, consolidation will save costs and make for increased efficiencies, driving down per-unit cost and ultimately, once the fall-out has settled, adding jobs - but only if growth can be sustained and exceed where we are now. To do that means exporting more - many more - of those cars. Given that right now is not the right time to be exporting cars, they had better have a compelling sales pitch - and that means low-cost, as in really cheap. Hopefully they will be reliable, serviceable and efficient. Otherwise I'll stick with my bicycle.