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Taking the High (Fuel Economy) Road

What Do the New Chinese Fuel Economy Standards Mean for Foreign Automakers?

New Chinese fuel economy standards are likely to affect automakers differently.

Executive Summary

The new Chinese fuel economy standards are an ambitious effort on the part of the government to regulate oil consumption from personal vehicles in China, a large contributor to China’s growing dependence on foreign oil. This dependency is expected to increase dramatically over the coming years, with the amount of crude oil imported rising from 31 percent in 2002 to over 50 percent in 2007. Over the next ten to fifteen years, China’s oil consumption is expected to increase 4 percent per year, placing China as the world’s second largest oil consumer behind the United States. However by 2020 China is expected to become the world’s largest oil consumer, with total projected oil consumption of 27.6 million barrels a day compared to 26.4 million barrels a day consumed in the United States.

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