SHANGHAI - One experimental clean-energy car runs on natural gas. Another uses ethanol distilled from corn. A third has a zero-emissions electric motor powered by a hydrogen fuel cell.

Visitors walk around a Ryuga Mazda car on display during The Shanghai Auto Show in Shanghai April 21, 2007. [Reuters]

These alternative vehicles were created not by a global automaker but by China's small but ambitious car companies, which displayed them Sunday alongside gasoline-powered sedans and sport utility vehicles at the start of the Shanghai Auto Show.

At a time when they are still trying to establish themselves in international markets, Chinese automakers are already investing in such avant-garde research in a bid to win a foothold in the next generation of technology.

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"This is the tide of the industry. If you don't go with the tide, the industry will pass you by," said Qin Lihong, a vice president of China's biggest domestic automaker, Chery Auto Co., in an interview ahead of the show's opening.

China's leaders are encouraging the development as part of efforts to cut pollution and rising dependence on imported oil and to make this country a creator of profitable technologies.

Chinese manufacturers are getting help from foreign automakers in joint ventures and from research alliances with Chinese universities and government laboratories.

Beijing has made cleaner cars a policy priority, targeting the field as one of 11 priority areas in a 15-year technology development plan issued in February 2006. It promised grants and tax breaks to support industry efforts.

The campaign embodies one of Beijing's strategies in technology development: Pick new areas with no entrenched competitors so China can make breakthroughs without huge costs.

While foreign automakers have a lead in conventional technology, "in new energy we're starting from almost the same line," said Chen Hong, the president of Shanghai Automotive Industries Corp.

"So we believe we can catch up with other auto companies and make great progress in developing new energy vehicles," Chen said.

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