China is the second largest automobile market in the world and now the world's third largest automobile producer, behind the US and Japan. Automakers produced 8.88 million motor vehicles last year, up 22.02% from a year earlier, including 6.38 million passenger vehicles and 2.5 million commercial vehicles.

And more impressively, China has surpassed Japan in purchasing power and is now the second largest economy in the world according to a new report released by the World Bank.

Despite its long-awaited arrival, 3G services from China Mobile have received a lukewarm response because of too few phone models compatible with the domestic TD-SCDMA standard and poor coverage. While it shouldn't be too long until more 3G phones are rolled out, extending coverage will likely take a lot longer. Given how long it took to initially launch 3G services, it seems optimistic to expect extensive network coverage within the next year.

The Los Angeles Times takes a look at China's IT outsourcing industry; while many have high hopes, it seems it will be a very long time until China will be able to compete with India in this space.

Despite China's falling trade surplus, the country's foreign exchange reserves grew by an astonishing US$154 billion in the first quarter of the year. Michael Pettis crunches some numbers and estimates that true foreign exhange inflows for the period may have been even higher, raising the ugly spectre that hot money inflows may have replaced trade as the major driver of foreign exchange growth.

And it is no suprise that China's central bank has reiterated its stance of using monetary tightening to curb inflation, which is looking like it is going to become more and more difficult to control as commodity prices rise and huge amounts of foreign currency flow into China.