China will not force foreign car parts makers to form local joint ventures image

The European trade body in China said the Beijing government does not plan to force foreign auto parts suppliers to form local joint ventures, discharging a report from last week which raised concerns among European firms.

The German newspaper Stuutgarter Zeitung cited the head of German parts maker ElringKlinger AG, who said that China tried to persuade three German car parts suppliers to form partnerships with local companies.

The European Union Chamber of Commerce in China stated on their website that “the European Chamber is confident that these rumors are unfounded and that the Chinese government has no intention to require the formation of joint ventures in the sector.”

It also added that the rumors might have resulted from a misunderstanding caused by existing restrictions from 2011 applied to suppliers in the e-vehicle segment. The trade body said it had spoken with the companies involved, the Chinese authorities, the country’s automotive manufacturers association and a number of member companies in the auto sector, stating that “the European Chamber has been reassured by the Chinese authorities that such a move would be contrary to government intentions to further liberalize the auto parts sector.”

The alleged joint-venture talks being forced upon Western companies come at a time when China’s antitrust regulators are gathering evidence into monopoly practices in the automobile and auto parts sector.

By Gabriela Florea