Chinese, global automakers showcase fuel-saving cars in world's fastest growing market

ANTING, China — The Habo No. 1 looks like any one of the legions of Volkswagen sedans in China. But a peek under the hood reveals an array of chrome canisters instead of the usual engine — the Habo is fueled not by gas but hydrogen peroxide.

"This car only emits water vapor and oxygen," said He Limei, project director for Shanghai Habo Chemical Technology Co., showing the Habo at an exhibition of ecologically friendly cars outside Shanghai.

"It uses rocket technology."

The Habo was one of 150 experimental and advanced-technology vehicles on display at the Challenge Bibendum, an expo named for sponsor Michelin's puffy mascot. The event, held at a new Formula One track outside Shanghai, reflects China's growing awareness of the dark side of its love affair with the car — dependence on imported oil, traffic-choked roads, cities awash in smog.

Even as booming demand has turned it into the world's fastest-growing auto market, China is pushing to develop alternative fuels. Foreign automakers are preparing to test cars and buses driven by fuel cells and gasoline-electric hybrid engines.

"Using conventional internal combustion engine technology alone will be a source of huge pressure in terms of energy security and environmental protection in China," Wan Gang, president of Shanghai's Tongji University, which has its own automotive studies institute, told participants in the Challenge Bibendum.

Efforts to develop "clean vehicles" are accelerating as China prepares to hold the 2008 Olympics in Beijing and the 2010 World Expo in Shanghai, Wan said.

The recent surge in world crude oil prices to over $50 a barrel has driven home the costs of relying on oil imports. China only became a net oil importer in 1993, but skyrocketing demand means it now buys 40 percent of its supplies abroad.

The vehicles displayed in Anting run on electric motors, gasoline-electric hybrid engines, fuel cells and other technologies meant to cut pollution and boost fuel efficiency.

Hydrogen peroxide reacts with silver to produce oxygen and heat that can be used to propel a rocket, or a car.

But He admitted the Habo needs a bit more work: the equipment required to run it fills the entire back seat and trunk.

"We only had three months to develop this," she said. "It's somewhat lacking aesthetically."

The Chinese government began looking at alternative fuels in the 1980s and is promoting diesel and fuels made of locally abundant materials.