China to pe­nal­ize US au­tomaker for mo­nop­o­lis­tic be­hav­ior Trump com­ments on trade, Tai­wan rat­tle US firms in China

Kuwait Times - - BUSINESS -

China will soon slap a penalty on an un­named US au­tomaker for mo­nop­o­lis­tic be­hav­ior, the of­fi­cial China Daily news­pa­per re­ported yes­ter­day, quot­ing a se­nior state plan­ning of­fi­cial. News of the penalty comes at a sen­si­tive time for China-US re­la­tions af­ter US pres­i­dent-elect Don­ald Trump called into ques­tion a long-stand­ing US pol­icy of ac­knowl­edg­ing that Tai­wan is part of “one China”.

Bei­jing main­tains that self-ruled Tai­wan is a way­ward prov­ince of China and has never re­nounced the use of force to take it back. In­ves­ti­ga­tors found the US com­pany had in­structed dis­trib­u­tors to fix prices start­ing in 2014, Zhang Han­dong, di­rec­tor of the Na­tional Devel­op­ment and Re­form Com­mis­sion’s price su­per­vi­sion bureau, was quoted as say­ing. In an ex­clu­sive in­ter­view with the news­pa­per, Zhang said no one should “read any­thing im­proper” into the timing or tar­get of the penalty.

The ar­ti­cle did not give fur­ther de­tails and the NDRC did not im­me­di­ately re­spond to re­quests for com­ment. China, the world’s largest auto mar­ket, has be­come cru­cial to the strate­gies of car com­pa­nies around the world, in­clud­ing ma­jor US play­ers Gen­eral Mo­tors Co and Ford Mo­tor Co. “We are un­aware of the is­sue,” said Mark Truby, Ford’s chief spokesman for its Asia-Pa­cific oper­a­tions. In a state­ment, GM said: “GM fully re­spects lo­cal laws and reg­u­la­tions wher­ever we op­er­ate. We do not com­ment on me­dia spec­u­la­tion.”

Com­ments un­set­tle com­pa­nies

The penalty fol­lows a gov­ern­ment crack­down on what it has called anti-trust be­hav­ior by for­eign au­tomak­ers and deal­ers. It would be the sec­ond penalty by the NDRC this month and the sev­enth fine is­sued to au­tomak­ers since the com­mis­sion be­gan anti-mo­nop­oly in­ves­ti­ga­tions in 2011, the news­pa­per said. Tar­geted firms have in­cluded Audi AG, Daim­ler AG’s Mercedes-Benz and Toy­ota Mo­tor Corp, and one of Nis­san Mo­tor Co Ltd’s joint ven­tures.

The NDRC’s move was not di­rected against Trump’s lat­est com­ments but to show it was not let­ting up pres­sure on price fix­ing be­hav­ior in the auto sec­tor af­ter a raft of fines last year, a source at a gov­ern­ment-af­fil­i­ated in­dus­try as­so­ci­a­tion said. “I don’t think NDRC had only made a de­ci­sion two weeks ago or a week ago. This is a long-term plan for them,” the source said. Lo­cal me­dia had re­ported NDRC of­fi­cials say­ing a penalty would be levied against an in­ter­na­tional au­to­mo­tive firm this year prior to Trump’s re­marks on Tai­wan, al­though they did not spec­ify it would be a US com­pany.

In a sep­a­rate ed­i­to­rial, the China Daily urged Trump to rec­og­nize the im­por­tance of close eco­nomic ties be­tween China and the United States rather than “try­ing to gain an up­per hand in what is es­sen­tially a win-win re­la­tion­ship”. “His­tory proves that what it good for Sino-US re­la­tions is good for their economies,” it said, not­ing that Chi­nese cus­tomers bought more than a third of the 9.96 mil­lion ve­hi­cles GM sold world­wide last year.

“For the Amer­i­can econ­omy to be great again... the US needs to ce­ment its eco­nomic re­la­tions with China, rather than de­stroy them.” Trump’s chal­lenges to China on trade and Tai­wan have rat­tled Amer­i­can com­pa­nies who have long ben­e­fited from sta­ble re­la­tions be­tween the two coun­tries. In 2011, China im­posed du­ties of up to 22 per­cent on large cars and SUVs ex­ported from the United States dur­ing a wide-rang­ing spat on trade and cur­ren­cies that be­came a fo­cus of crit­i­cism for US presidential can­di­dates. —Reuters

SHANG­HAI: A copy of the lo­cal Chi­nese mag­a­zine Global Peo­ple with a cover story that trans­lates to ‘Why did Trump win’ is seen at a news stand in Shang­hai. —AFP

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