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Firms Pay to Play China's Auto-Parts Market

Sean Li, center, of Tier-Hi Electrical Group Corporation. The company makes wire harnesses for the domestic Chinese market, as well as major car companies like GM North America.

Many auto parts companies are setting up shop in China, seeking low-cost labor and a spot in a booming economy. But many of these companies are now finding out that access to the fast-growing market comes at a cost.

While Chinese auto workers earn as little as $1.50 an hour, international firms are providing training that may drive that wage upward. And they're building modern factories in China as well, modernizing its production facilities.

The collaborative relationship between U.S. automakers and their Chinese hosts has some people worried. And while China is still a small player in the global automotive industry, it has large designs on the U.S. auto parts market. Chinese firms showed off their wares at this year's Society of Automotive Engineers conference in Detroit.


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