In the 1980s, most of the cars running around this sprawling industrial city were taxicabs and executive limousines. That was true for much of the People's Republic of China.

But an automotive explosion of sorts occurred in the late 1990s. A commercially liberalized China opened its doors to automotive manufacturers and suppliers worldwide. The newcomers formed joint manufacturing and retail ventures with existing Chinese car companies, such as the Shanghai Automotive Industry Corp. (SAIC).

After a few shaky starts and some outright failures -- for example, General Motors Corp.'s ill-fated Jinbei GM, which manufactured Chevrolet Blazer SUVs -- sales of private passenger cars and trucks accelerated.

In 2003, the newcomers and their Chinese partners sold 4.56 million passenger cars and trucks. Today, there are 27 million privately owned vehicles on China's roads.

Automotive manufacturing and sales have grown so rapidly in China that it now ranks as the world's third-largest national automotive market, behind the United States and Japan. In reaching that level, China supplants Germany as No. 3.

Although China's car sales have cooled this year, simmering down to an annual growth rate of 12 percent from a super-heated growth rate of 36 percent in 2003, global auto-industry analysts expect China to knock Japan out of the N0. 2 spot by 2010 and to catch up with the United States, the world's single largest automotive market, by 2025.

From an economic perspective that's the good news, says Chen Bin, director general of the industrial department of China's National Development and Reform Commission. But China's automotive blessing is in danger of becoming a curse, he said.

After years of struggling to rid China's urban centers of stifling smog from coal-burning plants and other pollution sources, and achieving some success in those endeavors, "we're now going backwards on emissions," Chen said in an address last week to the sixth meeting of Michelin Corp.'s Challenge Bibendum, an annual exhibition of the world's most promising clean-car technologies.

Bibendum? That's the name of Michelin's famous fat, rubbery mascot, which has represented the French tiremaker since 1898.

Chen said China is in desperate need of those technologies -- gasoline-electric and diesel-electric combinations of engines and motors; alternatively fueled vehicles using compressed natural gas, liquid propane gas and biodiesel fuels; and, eventually, hydrogen-powered cars and trucks. (One Chinese company even demonstrated a Volkswagen sedan powered by hydrogen peroxide!)

At any rate, China, with a population of 1.3 billion people, and all that such a huge population means for the possible growth of future automotive sales, cannot afford to follow the West down gasoline alley, Chen said.

"Oil consumption in China is already high, and there's not enough oil," Chen said. "We need more fuel-efficient vehicles, cleaner vehicles. We need more electric vehicles and hybrids."

To that end, China already is appealing to the world's automobile manufacturers to comply, he said.

That appeal, made more enticing by the fiscally seductive lure of what could become the world's largest car market, is bringing about some unusually cooperative behavior in regulatory matters from the world's biggest automobile manufacturers.

Both GM and Ford Motor Co., often accused of moving slowly or not at all on environmental concerns in the United States, are emerging as environmental leaders in China.

Both companies are investing billions in developing new, cleaner cars, trucks and buses for the Chinese market. In cooperation with China's SAIC, GM last week announced the sale of a fleet of diesel-electric hybrid buses to the city of Shanghai.

The buses, hundreds of which have been sold to U.S. municipal governments over the past few years, use 60 percent less diesel fuel than regular diesel-powered buses. They reduce diesel-particulate emissions by up to 90 percent and cut dangerous nitrogen oxide emissions by 50 percent.

"We calculated that if you placed these hybrid buses in the nine largest U.S. cities, you'd save roughly 40 million gallons of fuel annually, equivalent to a half-million hybrid cars," said Elizabeth Lowery, GM's vice president for environment and energy concerns.

Still, eyeing emerging car markets, GM intends to transfer diesel-electric and other fuel-efficient technologies to personal automobiles and trucks as quickly as possible, Lowery said.

Ford officials made similar claims, with Ford vowing to introduce what it says will be "the world's cleanest internal combustion engine" in China and elsewhere, possibly within the next two years.

The engine, demonstrated here, is a hydrogen-powered unit that produces "near zero carbon dioxide emissions," according to Susan Cischke, Ford's vice president for environmental and safety engineering.

Executives and engineers from Germany's Volkswagen AG and Sweden's Volvo AB, and from Toyota Motor Corp. and Honda Motor Co. in Japan, also came here to demonstrate their latest clean-car wares; and it all left me with the oddest notion:

Wouldn't it be funny if Communist China led the capitalist world to cleaner, better cars and trucks?

Children dance around General Motors China executives at GM's announcement of its first joint hybrid bus program with Shanghai Automotive Industry Corp.