China has positioned itself as the world’s largest auto market, surpassing the U.S. with sales surging 36.5% year-over-year to 1.14 million units in June 2009. According to the China Association of Automobile Manufacturers, passenger car sales in China were 872,900 vehicles in June, 2009 whereas passenger car sales in the US for the same period were 859,847 units.

According to the Associated Press (AP), China’s total vehicle sales were up 17.7% to 6.1 million vehicles during the first half of 2009. China has overtaken US auto sales for five of the past six months. The U.S. market temporarily took the lead in May 2009 only to drop again the following month.

Stimulus package including lower sales tax, subsidies to trade in older cars and other incentives provided by the government has helped sales in China. According to the AP, the government of China has reduced retail sales tax on small cars by

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American markets at a standstill… can the Far East drive stocks forward? … Chris Mayer on buying “what China needs, but can’t make for itself” … Dan Denning’s pair trade for the next decade … Bill Bonner and Goldman Sach’s CEO on the current “bull market” … Plus, a CEO pay debate fills our inbox… your letters and our response, below…

The Dow crashed 1.4 points yesterday, wiping out Monday’s 1.3 point moonshot. Desperate for something beyond these 0.014% “swings,” the market’s putting China in the driver’s seat today… and these guys still have quite a lead foot:

Chinese auto sales soared 34% in May, year over year. According to the China Association of Automobile Manufacturers, the Red Nation scooped up 1.12 million vehicles last month, outpacing any nation in the world. Consider the course of the last 12 months,

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The Dow crashed 1.4 points yesterday, wiping out Monday’s 1.3 point moonshot. Desperate for something beyond these 0.014% “swings,” the market’s putting China in the driver’s seat today… and these guys still have quite a lead foot: Chinese auto sales soared 34% in May, year over year. According to the China Association of Automobile Manufacturers, the Red Nation scooped up 1.12 million vehicles last month, outpacing any nation in the world.

Consider the course of the last 12 months, and then look at this chart… is China even part of the global slowdown?

We don’t want to get too excited about this growth, as much of these sales are a product of Chinese government stimulus. But I.O.U.S.A. is certainly throwing a bunch of money at this crisis as well, and the same measure of auto sales here

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It will be interesting to see if this is the start of a trend or an Olympic induced anomaly. We won't know until a month from now but this is getting a lot of "attention" as a "signal" that China is slowing severely. Maybe it is. Maybe it isn't. But it really doesn't matter - if enough hot money believes it is, than it is. Even if it isn't. Perception is reality. China's passenger-car sales fell in August for the first time in more than three years as the Beijing Olympics and a slumping stock market prompted drivers to delay purchases. Sales of passenger cars, sport-utility vehicles and multipurpose vehicles totaled 451,300, the China Association of Automobile Manufacturers said in an e-mailed statement today. Demand for cars in the world's second-largest vehicle market cooled as ...