China's State-Owned Automakers May Be Too Weak to Compete
Posted in: Uncategorized
Every year, China’s big state-owned automakers celebrate their inclusion on the list of Fortune 500 companies — the ultimate status symbol for up-and-coming companies.
So the last thing these automakers want you to know is how very weak they really are. But that’s changing. Last week, some of the companies finally admitted that they can’t survive without the partnerships they’ve formed with foreign automakers. And they did so by warning Beijing not to allow foreign automakers to gain majority shares of their Chinese joint ventures.
Under current policy, foreign automakers that want to produce vehicles in China must form joint ventures with Chinese companies. The rules also limit foreign ownership in these partnerships to 50 %. China enacted the policy in the 1980s when it opened its auto industry to the outside world.
Post a Comment