China: TIME Global Business: Moving Too Fast?

China is producing more goods than it can consume. Will they swamp the world?

Old Chinese bomb factories rarely die. They just become car plants. At least that's what has happened at Qin Chuan in the northern city of Xi'an. The aging state-owned enterprise, which a decade ago made 130-mm artillery shells, now houses assembly lines that stamp out a boxy four-door hatchback called the Flyer. It built just 17,000 vehicles last year; many of the underpowered and unattractive cars were bought by local taxi companies on the order of provincial officials looking for a captive market. But even that didn't dismay factory managers trying to cash in on China's booming car market. In February,...

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