China has a serious image problem in the auto sector, Changan, Cherry and a host of other brands that I have almost never seen on the road have entered the market at various times with very competitively priced products but have been done in by the lack of durability of their products. FAW is a Chinese manufacturer offering decent vehicles but again, their prices are more or less at par with the more well-established Japanese brands which limits their overall impact on the consumer trade.
As for the European Brands, how competitive they are will eventually depend on the kind of duty structure that they enter the market with. The Higher-end basic Sedan market right now stands around US$24-27k, I think a large portion of the population will be looking to upgrade their finance plans to add about another US$10,000 if it gets them a BMW or an Audi Basic Sedan.