Tesla, General Motors, Volkswagen and other automakers scored a big win Tuesday as China announced plans to lift strict rules requiring foreign car companies to share profits and operations with local firms.
The decision comes after President Xi Jinping recently signaled plans to lower import tariffs and ease ownership restrictions in a move widely viewed as a bid to avert a trade war with the U.S.
It likely will make it easier for American car companies — not to mention German, Japanese and Korean automakers — to rack up profits in China, the world’s largest automotive market.
President Trump has been fiercely critical of the country’s trade policies and intellectual property handling and has threatened steep tariffs.
China no longer will require foreign automakers to establish joint ventures with local companies to manufacture vehicles in the country. The rule will be phased out within five years.
It’s a profound break from the past for China, which, critics say, established the policy to help its domestic auto industry grow without gaining technological prowess and manufacturing know-how on its own.
Nearly 29 million vehicles were sold in China in 2017. That’s about 11 million more than U.S. consumers bought.
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SOURCE: USA Today, Nathan Bomey