{"id":81128,"date":"2014-09-02T11:45:00","date_gmt":"2014-09-02T15:45:00","guid":{"rendered":"http:\/\/www.thedetroitbureau.com\/?p=81128"},"modified":"2014-09-02T11:45:00","modified_gmt":"2014-09-02T15:45:00","slug":"foreign-automakers-feel-under-the-gun-in-china","status":"publish","type":"post","link":"https:\/\/thedetroitbureau.com\/2014\/09\/foreign-automakers-feel-under-the-gun-in-china\/","title":{"rendered":"Foreign Automakers Feel Under the Gun in China"},"content":{"rendered":"
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Daimler, which recently announced a joint venture with Chinese maker BYD, is under investigation by anti-monopoly regulators.<\/figcaption><\/figure>\n

It\u2019s the world\u2019s largest automotive market, and manufacturers as diverse as Daimler AG and General Motors already sell more vehicles in China than they do in the U.S. But they and other foreign companies are beginning to wonder \u201cat what price?\u201d<\/p>\n

Both GM and Daimler, the parent of Mercedes-Benz — along with Audi, Chrysler and other carmakers — have come under investigation by China\u2019s regulators, who have already levied more than $200 million in fines against a dozen Japanese auto parts suppliers for alleged price fixing.<\/p>\n

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Global Scope!<\/figcaption><\/figure>\n

And while the country\u2019s President Xi Jinping has promised to open up the Chinese economy to increased foreign competition, a new study reveals there\u2019s growing concern that precisely the opposite is happening.<\/p>\n

A full 60% of those who responded to a survey by the American Chamber of Commerce in China said they feel \u201cless welcome\u201d in China. By comparison, only 41% responded that way a year ago.<\/p>\n

Nearly half of the 365 respondents complained they are being targeted for \u201cselective and subjective enforcement\u201d by Chinese regulators, with a growing sense that the country\u2019s bureaucracy is being used as a shield to help protect local manufacturers who might otherwise fail in the face of foreign competition.<\/p>\n

(Russia ready to retaliate, and U.S. automakers could take the hit. <\/em>Click Here<\/span><\/a> for the story.)<\/em><\/strong><\/p>\n

That has been reflected in comments by a number of senior automotive industry executives who have discussed the situation in China in recent months. Few have been willing to express their concerns on the record for fear of angering regulators and triggering still further crackdowns.<\/p>\n

Such concerns have been mounting, and not just in the auto industry. Chinese regulators have also been cracking down on food service and other sectors of the economy. Statements in local and government publications have defended such moves, among other things pointing to the problems that have surfaced involving food contamination over the last several years.<\/p>\n

Chinese regulators have, meanwhile, asserted that automakers are charging far in excess of justifiable prices for spare parts. And they aren\u2019t alone. India has now levied substantial fines against a wide range of automakers and suppliers, and the largest penalty was assessed against local automotive giant Tata Motors. The U.S., meanwhile, has brought both civil and criminal charges against a number of Japanese partsmakers for alleged price fixing, several senior managers being sentenced to jail.<\/p>\n

(India cracks down on automakers, auto parts suppliers. <\/em>Click Here<\/span><\/a> for the latest.)<\/em><\/strong><\/p>\n

But the Associated Press reports that the Beijing government is using such concerns to selectively target foreign companies while largely ignoring domestic firms in a bid to create so-called \u201cnational champions\u201d by shielding them from competition \u2013 exactly the opposite of what the 6-year-old Chinese anti-monopoly law was intended to achieve.<\/p>\n

\u201cMany areas of regulation are overly focused on foreign multinationals,\u201d said the American Chamber\u2019s Chairman Greg Gilligan.<\/p>\n

The organization warned that despite the rapid growth of China\u2019s consumer market, such selective enforcement could backfire, China risking the possibility that it \u201cwill permanently lose its luster as a desirable investment destination.\u201d<\/p>\n

So far, there have been no outward signs of retrenchment, at least in the auto industry, where giants like Volkswagen AG, Toyota, GM and Ford have committed billions of dollars to expand production capacity to keep up with booming demand. But insiders warn they are growing nervous about ongoing trends and wonder whether China will take other steps to boost the fortunes of local auto manufacturers who have continued to lose market share in recent years.<\/p>\n

(Volvo “likely” to import S60L from China to the U.S. in 2015. <\/em>Click Here<\/span><\/a>for that report.)<\/em><\/strong><\/p>\n

Trade officials from the U.S., the European Union and Japan are watching to see if China\u2019s anti-monopoly crackdown crosses into a clear violation of international trade agreements. But government officials insist they are being fair.<\/p>\n

“We believe the fairness of the law enforcement will be better reflected as the number of cases increases,” said anti-monopoly director Xu Kunlin, in comments in the English-language China Daily.<\/p>\n","protected":false},"excerpt":{"rendered":"

It\u2019s the world\u2019s largest automotive market, but a growing number of manufacturers are beginning to wonder \u201cat what price?\u201d A new study of foreign companies operating in China finds increased concerns that an “anti-monopoly” crackdown is really just a way to give Chinese companies an unfair boost. More from TheDetroitBureau.com.<\/p>\n","protected":false},"author":2,"featured_media":75469,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","footnotes":""},"categories":[8],"tags":[],"make":[],"post-state":[],"category_old":[151],"acf":[],"_links":{"self":[{"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/posts\/81128"}],"collection":[{"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/comments?post=81128"}],"version-history":[{"count":0,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/posts\/81128\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/media\/75469"}],"wp:attachment":[{"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/media?parent=81128"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/categories?post=81128"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/tags?post=81128"},{"taxonomy":"make","embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/make?post=81128"},{"taxonomy":"post-state","embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/post-state?post=81128"},{"taxonomy":"category_old","embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/category_old?post=81128"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}