China has no need to buy American cars; it can buy all the made in China cars it requires. A big concern in the auto industry is increasing Chinese auto exports. They already export to Europe and North America is next.


 Note that Chinese auto production includes a mix of both domestic and foreign firms. While GM lays off in NA it is expanding its operations (and employment) in China.


 Higher oil prices should have less impact on Chinese consumers. In China it is the top 25% of the earners (say 328,493,428 people) who are buying cars. Since they are riding an economic boom with year over year growth of around 10%, they can easily afford higher fuel prices. In the US, the bottom 50% of the population (around 14,7867,067 people) are already burdened with stagnant incomes and high levels of debt. This group will feel increasingly squeezed as prices rise. You only need to look at the relative numbers involved to get a sense of the size and scope of the problem.


 With regard to the energy used in production, these costs will be passed through to the consumer in the form of higher prices. Who buys all these cheap Chinese goods? Walmart. Who buys from Walmart? The same folks who are getting squeezed on variable rate mortgages, increasing credit card debt (need gas? Chanrge it.), higher heating and cooling costs, and higher transport costs, will be paying more for everything else as well.


What is the ultimate outcome? Not sure at this point apart from the fact that it is not going to be pretty.