China manufacturing firms plunge on foreign ownership plan

China manufacturing firms plunge on foreign ownership plan

China on Tuesday said it will slap a temporary fee on US sorghum, used as feed meal in China, in a preliminary anti-dumping ruling after a Chinese probe launched more than two months ago. But the ownership structure has proven to be a stumbling block, with Chinese authorities insisting that the plant be set up through a joint venture with local partners, while Musk wanted it to be fully owned by Tesla, according to Bloomberg.

However, Tesla and Shanghai officials have disagreed about the ownership of the proposed electric vehicle factory.

Mr Trump has threatened tariff hikes on $150bn of Chinese goods, partly in response to complaints that China puts pressure on foreign companies to hand over technology.

"Foreign companies may already be in a box [in China]", said Chao, adding the joint venture structure was now so ingrained many might not want to change it.

China has long held onto a pretty strict limit for foreign ownership of automotive ventures within its borders, but that wall is about to be torn down.

Analysts said the main beneficiaries, at least in the short term, would be manufacturers focused on new-energy vehicles, including US electric carmaker Tesla, which has been seeking to set up its own plant in Shanghai.

The looser rules are likely to raise pressure on China's vehicle makers.

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While the US EV-maker would stand to benefit, local brands such as BYD or BAIC Motor (Daimler, Hyundai joint ventures) could end up encountering tough competition from any lower-priced Tesla models, said Rhb Osk Securities analyst, Dan Zhuang. "Foreign carmakers will be happy as they won't have to share 50% of the profits with their Chinese partners". According to data from auto intelligence firm Jato Dyamics, China sold a total of 227,000 electric vehicles covering January to September in 2017, with a growth rate of 126 per cent.

A senior General Motors executive said last week the US carmaker, even without ownership caps, would not cut ties with local partner SAIC Motor Corp. The source, who asked to remain anonymous because of the sensitivity of the matter, added GM would not be as successful in China on its own.

In a statement on Tuesday, GM said its growth in China was "a result of working with our trusted joint venture partners".

SAIC General Motors Sales Co., a joint venture between GM China and SAIC that was established on November 25, 2011.

The new list will include the already announced opening of the financial services and vehicle sectors, and expand to include further opening for the energy, resources, infrastructure, transportation, and other sectors, the NRDC announcement said.

Japan's Nissan Motor Co said in a statement that it would "monitor how any specific policies develop and will plan accordingly".

The move also comes after President Xi Jinping said last week the country would scrap ownership limits "as soon as possible", encouraging global auto brands even as a fierce standoff over trade intensifies between Beijing and Washington.

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