Changing Times: China Is Driving BMW's Profits

When the leaders of the world's largest economies gathered in Seoul in November 2010, the mantra was "global rebalancing" — the idea that the world economy should rely less on the American consumer and more on shoppers in China and other surplus countries. The aim, as the Wall Street Journal framed it, was a firmer foundation for growth and less financial instability.

The summiteers were late to their own party. Germany's carmakers had already done the rebalancing with their feet: China had become the engine of their profits, with luxury brands selling more cars in Chinese showrooms than they had ever imagined possible. BMW, Audi, Mercedes — the German industrial miracle was increasingly being powered by Chinese buyers.

There was something deliciously ironic in it. Western leaders arrived in Seoul to lecture about imbalances while their own flagship companies depended on the surplus country's consumers to keep the factories running. The rebalancing had already happened. It just wasn't the one anyone had planned.

India, watching from the sidelines, had its own lesson to draw: the next great consumer market wouldn't belong to whoever manufactured the most, but to whoever understood the new middle class first. China understood it. The question was who would be next.