The Beijing Motorshow is, by some distance, the strangest car exhibition it has been my pleasure to attend.

Here, spreadeagled across nine colossal halls, the cream of European automotive nobility from Ferrari, Lamborghini and Maserati to Rolls, Bentley and Porsche rub shoulders with companies like Build Your Dreams, Hawtai, Chery and Zotye.

Here people do mad things, like stretch a Rolls-Royce Phantom to more than double its original length, or celebrate the fact they’ve made a really terrible copy of the Morgan Aero 8. There are concept cars that would look outlandish on the moon and bread and butter transport models that rather less appealing than a bus pass. And the smog. Oh the smog. I’ve never seen smog inside before, but you get it here.

The feel is of a local show that’s been involved in some terrible radioactive accident and mutated to ten times its comfortable size. It is here that Mercedes decided to uncover a four door coupe that looks likely to redefine affordable yet stylish motoring, yet should you try to communicate with any of the domestic brands, most won’t even have any literature in English, let alone anyone you can talk to. Most just look thunderstuck that you’ve expressed even a passing interest in what they’re up to.

But interesting it is. Right now the Chinese car industry is doing a very good impression of a sleeping giant. Outwardly it’s doing what it’s always done and producing cars either of no discernible merit or so crazy only the most independent of spirits could possibly be interested in them. Driving around Beijing I was shocked to see how few indigenous cars were on the road: the common or garden default setting seemed to be a Hyundai while those with money drive Mercedes and Range Rovers. But beneath the surface, things are starting to change.

Some have started to buy European brands. SAIC owns MG, Geely owns Volvo. There’s a company here called Youngman which has a brand called ‘Engineered by Lotus’ and, if the speculation is to be believed, it may one day be more than a brand it owns. And if they can’t buy brands, they do deals instead. A company called Build Your Dreams may not sound desperately serious but it is. Serious enough to go into a joint venture with none other than Mercedes Benz to produce a new range of electric cars. Why? Because it needs Mercedes technology and Mercedes needs access to a domestic electric vehicle market slated to rise from its current 10,000 cars to something closer to five million by 2020.

China is also learning the lessons of the Koreans: 20 years ago Hyundai was a joke and Kia an unknown, but combined they now add up to the fifth largest car company in the world. Bigger, indeed, than Ford.

I’m not saying for a moment our market is soon to be flooded with cheap Chinese tat filling in the budget end of the market vacated by the Koreans because the European consumer now has a more sophisticated taste in new cars and would rather buy a good car that was a couple of years old than a new one that was rubbish. What will happen is that the Chinese will learn from their European partners and the quality of their product will improve exponentially.

Who will suffer as a result? Not the Koreans but, rather, European marques without the brand values to charge the money required to mitigate the huge overheads created by their unrealistic labour costs. It took the Hyundai/Kia 20 years from market introduction to become a top five player. Who’d like to bet one Chinese brand or another won’t do the same in ten?