The president of GM International Operations was speaking at a press briefing last week in Shanghai.

Reilly gave two reasons why GM cannot export from China to the U.S. "One is we have product here that is useful in emerging markets rather than in the U.S.," he said.

The other reason is that GM is not short of capacity in the U.S. for any particular vehicle that might be made in China. "And in fact the latest new entry for the U.S., which going to be a small car, is going to be built in the U.S.," he added, without specifying what small car he was talking about.

Reilly said having international operations in Shanghai enables the U.S. automaker to leverage what it has in China for other parts of the world. 

"So yes, in the future Shanghai will become more significant as a developer of products that can be used not only in China but also in the other parts of the world that require similar products," he added.

A Chevrolet-badged small car, the new Sail, will be launched by Shanghai General Motors Co. in February next year. Mainly developed by the Pan Asia Technical Automotive Center (PATAC), the car will target China as well as other emerging markets, according to information released by GM China.

Located in Shanghai, PATAC is jointly run by GM and Shanghai Automotive Industry Corp. (SAIC).

"We have seen how there are similar requirements in other parts of the world for products that PATAC is involved with, and also SGM-Wuling is involved with," he added.

Short for SAIC-GM-Wuling Automobile Co., SGM-Wuling is GM's joint venture in southwest China's Guangxi region. In mid-2008, GM started rebadging some of the joint venture's van products and exporting them to Latin America, the Middle East and Africa under the Chevrolet brand.

In addition, Reilly said he believes China will likely become a world leader in developing small electric vehicles thanks to strong demand in Chinese cities for these vehicles in the future as well as the government support for the technology's development.