As global auto companies look for ways to cut costs, "China is a natural" to produce "built-up cars and components," Wagoner said in an interview Monday during a visit to China as part of a group of international business leaders, according to the report.

GM, the world's largest auto maker, and other struggling U.S. and European car companies -- which are laying off workers and cutting production at home -- have been expanding in China, the world's second-largest vehicle market after the U.S., and one of its fastest-growing, the report commented.

Most foreign auto-making ventures in China are aimed at producing vehicles for local buyers as more Chinese join the ranks of the middle class. But, increasingly, car companies are looking at China as a possible low-cost production base, the report added.

GM sends engines made by one of its joint ventures with state-controlled Shanghai Automotive Industry Corp. to its plants in Canada and the U.S. The partners have also exported small numbers of Chevrolets, designed by a GM affiliate in South Korea, from China to Russia and Chile.

Honda Motor Co., of Japan, exports its Fit compact to Europe from a plant in southern China, while DaimlerChrysler AG is in talks with state-owned Chery Automobile Co., of China, about making small cars under the company's Dodge brand for sale world-wide.

However, the report also noted that overseas manufacturing by U.S. car makers is a sensitive political issue in America and a point of contention with the United Auto Workers union.