For decades, You Xiaoyi rode a bike to his job at a state-run factory in China. In the 1980s he upgraded to a Beijing public bus. But today You, 70, owns his own factory, and he's ready for the ultimate status symbol of China's accelerating middle class: a new car. He test-drove Buicks and Audis but settled on a silver $15,000 VW Jetta. "Chinese aren't worried about Maoist ideologies anymore," he says, looking out over a sea of new models on a Beijing lot. "We're only concerned with making money."

Voracious new capitalists like You are making China the hottest car market in the world. Last year China snapped up more than 4 million cars, surpassing Germany to become the world's third largest car market. And auto execs say China is poised to become the world's No. 2 auto market--trailing only the United States. That's why giddy auto execs descended on the Beijing Auto Show this month. General Motors launched its Cadillac luxury line with a dazzling ceremony at the Forbidden City, staged by filmmaker Ang Lee. Ford showed off James Bond's Aston Martin, while also unveiling a new design for its Focus small car--a debut normally reserved for Europe or Detroit. To global automakers beset by high gas prices and brutal price wars elsewhere, China is the new promised land. The world's six largest carmakers just pledged $17 billion to build Chinese factories in the next few years. "If you're going to be a major player," says Ford Asian-marketing exec John Felice, "you've got to be a major player here."

A decade ago, this would have seemed impossible. Back then only six car models were sold in China, purchased mostly by bureaucrats. Today, individuals account for three quarters of the market and can now choose from 90 models. Those many freshly minted millionaires among them have made China the world's No. 1 market for the Audi A6 and BMW 760Li.

To keep the Chinese express rolling, the emerging middle class has to get on board, analysts say. And that's been complicated lately by Chinese government efforts to tap the brakes on the economy by clamping down on easy-money car loans. But that's not stopping buyers like You, who, like most Chinese, paid in cash for his Jetta. The biggest obstacle You faces is growing gridlock. But that's not so bad with music flowing from his car's CD player. "If we get stuck in a traffic jam," he says with a shrug, "we'll just sit it out." After all, it still beats the bus.

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