Power Shift To China? America Loses Car Crown, Germany Loses As World's Top Exporter

China has overtaken the United States to become the world's biggest car and van market in 2009. And China has edged past Germany in 2009 to become the world's top exporter. Are these accolades the latest evidence of American decline and Chinese ascendancy?

China has overtaken the United States to become the world's largest auto market. Official figures released on Monday show the country sold more than 13.6 million vehicles in 2009. That's up more than 46 percent from the year before.

It is a hugely symbolic blow to the standing of the US as a nation renowned for the mass production of cars, which began with the Model T Ford.

China's auto sales surged to reach record levels in 2009, underscoring China's importance to the global auto industry. Bob Lutz, General Motors' (NYSE:GRM) vice chairman says that the Chinese taste for vehicles will drive demand in the future.

According to Bob, China is a market which will ultimately be as big as the European market and the U.S. market combined.

Meanwhile, the new numbers from China's customs agency say the country's exports for 2009 were more than $1.2 trillion, slightly ahead of Germany.

Exports in December rose nearly 18 percent from a year earlier. At the same time, imports leapt nearly 56 percent. In addition to being the world's largest exporter, China is already the biggest auto market and steel maker.

The export growth helps China's quest to become the next global economic superpower has taken an important step forward.

China is predicted to overtake Japan as the world's second largest economy as early as this year, while annual growth rates of nearly 10% put it on course to eventually overtake the US as the world's economic superpower in a matter of years.

The benefits for China are clear. In the short-term the money it makes from exports can be used to buy more raw materials, or to invest more heavily in Chinese business and infrastructure.

However, economists in Asia have in recent months increasingly expressed concern that the massive government spending might exacerbate imbalances in the economy in the long-term, leading to overcapacity in some industries and bubbles in the property markets. Notwithstanding the concerns, officials here stressed last week that current policies would remain in place.

According to an article in New York Times "As China Rises, Fears Grow on Whether Boom Can Endure", the shift of economic gravity to China has occurred partly because growth here remained robust even as the world’s developed economies suffered the steepest drop in trade and economic output in decades.

Sustaining a global-size economy is nowhere near as simple as building one, some Chinese and Western economists say. As the Chinese navigate toward a bigger role in the world financial system, they are already running into diplomatic and political headwinds.