China Considers Opening World's Largest Market Up To Foreign Automakers Without Domestic Partners

China’s government is considering the removal of caps on stakes foreign carmakers can own in joint ventures with local partners, potentially loosening a policy criticized for shielding state-owned companies from competition and building their own brands.

Xu Shaoshi, chairman of the National Development and Reform Commission, said the government is looking into lifting the 50 percent cap in an interview at a World Economic Forum event in Tianjin. China has mandated that foreign players enter joint ventures with domestic partners to operate in the country since 1994.

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TheSteve - 6/30/2016 4:41:56 PM

-1 Boost

Doing business with China, or in China, is a bag of hurt. However, the lure of a huge market (hopefulness of sales and profit) and low manufacturing costs (yay profit) keeps our companies shaking hands and smiling with The Regime.

Latest fun fact: China is where you get a "free" copy of a computer OS (via piracy) rather than paying for it. That's normal in China, and it has been for many years! Chinese computer users have been impacted by Microsoft's aggressive push to install Windows 10 on WIndows 10 and Windows 8.1 PCs (secretly, and then through deceptive means), regardless of the consumer wants it. And yes, some users have had horribly negative experiences including bricked PCs. But hey, Windows 10 is free, even if it overwrites a pirated copy of Windows 7 or Windows 8.1. Well, a Chinese government agency representing The People of The People's Republic of China are currently suing Microsoft for pushing Windows 10 and causing "loss of productivity" to The People. Same Chinese government agency is apparently okay with rampant piracy, copyright, and patent violations in The People's Republic. It's business as usual in China: We have the huge consumer market that envies Western products; We have the massive cheap (near slave) labor force; **WE** make the rules!

MDarringer - 6/30/2016 5:37:10 PM

-1 Boost

Them "opening up" like this is a powerful expression for two reasons. The first is that should they decide to start exporting cars in a big way--because the joint venture thing is "gone"--countries will have a hard time justifying tariffs against Chinese cars. The second reason is that by being removing the joint venture thing in China, when--not if--GAC decides to swallow FCA making a case for co-ownership will be hard to justify. Geely's purchase of Volvo was a tentative first step in getting western markets comfortable with a full takeover.

FCA is an obvious next grab as is PSA and potentially parts of VW.