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    China's car growth poses energy, environment hazards

    SHANGHAI (AFP) May 11, 2004

    China's growing love affair with the automobile is set to deepen over the next 20 years but the industry faces grave challenges with gas shortages, traffic congestion and environmental pollution topping the list.

    China's auto sector has great growth potential as only an average of 20 people per 1,000 own cars compared with global figures of 120 per 1,000, the China Daily reported Tuesday, citing Chen Qingtai, deputy director of the State Council's Development Research Centre.

    "New vehicle sales in China will increase by at least 10 percent annually within the next two decades, also given a lift by the nation's steady economic growth, which is expected to be seven percent a year," Chen said at an automobile conference in the southern city of Guangzhou.

    Hoping to cash in on the world's fastest-growing car market, most foreign auto giants have set up manufacturing bases in China.

    While that means the auto industry will provide jobs and contribute to long-term economic growth, Chen cautioned that difficulties lie ahead.

    He warned that car ownership, forecast to rise to some 57 million units by 2010 and 130 million by 2020, will squeeze oil supplies.