AUTOS: STUCK IN FIRST GEAR.

The article discusses the difficulties facing foreign automakers in China. Beijing's meddling is a big part of the problem. In the early 1990s, when China regarded cars as a "pillar industry" of the future, policymakers pushed to set up huge, world-class plants. But when the economy overheated, Beijing imposed tight-money policies that suppressed car demand. The result: last year, passenger-car sales rose by 19%, to 382,000. Capacity, however, reached 700,000 and will continue to grow dramatically. Adding to the competition is car smuggling from Japan and South Korea, which some industry sources estimate reached 100,000 units last year.