Feb
28
Why China’s State-Owned Companies Make More Cars Than They Can Sell
Posted in: Uncategorized
Overseas observers often fret about overcapacity in China’s auto industry.
But the problem afflicts few foreign automakers or private Chinese companies. At least three state-owned automakers, though, have amassed huge surplus capacity and are in no hurry to reduce it.
Why? Because the state-owned companies have no reason to align output with demand. They subsist on government subsidies and profits generated by their joint ventures with foreign automakers.
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