The exponential growth of China's auto market has left many automakers licking their lips at the thought of rampant profit. Recent years have seen the country's government spur foreign investment with various incentives, including reduced tariffs on imported manufacturing machinery. According to Automotive News, that's all about to stop. China has said it will cease encouraging foreign investment in a move designed to promote natural growth in the sector. The country saw automotive growth drop to one tenth of what it was in 2010.
That's not to say China is putting a stop to all aid to foreign automotive investment. The report says China will still encourage foreign automakers to develop green technologies within its borders.

Automakers from General Motors to Toyota and Volkswagen have all focused more heavily on the Chinese auto market in recent years. Honda recently began producing Fit models in China for sale in Canada as part of an effort to move more of the company's production out of Japan, as well. Similar strategies may become less cost effective as China makes it more difficult for foreign companies to invest in manufacturing.


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  • 27 Comments
      tenspeeder
      • 3 Years Ago
      Hey folks in DC. Take note
        caddy-v
        • 3 Years Ago
        @tenspeeder
        He's taking notes and he has directed his cabinet to write a formal apology. He also instructed his campaign spinmiester, Axlehole, to figure out how to blame Bush.
      BFE
      • 3 Years Ago
      There's obviously a lot of China hate going on here. First of all, they aren't kicking anyone out. They are just discouraging new automakers from getting in, the ones that are there will stay at least until the contracts expire. Also, every automaker in China knows what they are getting into and they are raking in tons of profit from it. Finally, giving the domestic industry some help? How insidious, the Chinese! *Nobody* else does that!
      thedriveatfive
      • 3 Years Ago
      This move will ultimately weaken them. Globalization is what dragged them out of communist era thinking and technology. There inflation rate is growing while there growth is slowing. They are moving toward first world nation status faster then almost anyone except Brazil. This is a huge risk for there government. At this moment china is not really communist anymore, rather its people are developing capitalist values and value a healthy economy over a political ideology. If there government forgets this they will be deposed. All these people who think china is the enemy have never been there. When I was in Beijing I was astounded by the efficiency of the city. They are catching up very fast but most of all what I noticed was the feeling of commerce. People clearly were friendly and also wanted to encourage trade. If there government trys to stop that in any way it will be overthrown, probably by its own military. Communism reigns supreme in name only now, capitalism is the new ideology and we are there strongest ally.
      Adrian
      • 3 Years Ago
      Oh, I guess they've robbed American/German/Japanese automakers of enough automotive technology to make a crappy Chinese brand become somewhat self-sufficient. The Chinese are nothing but thieves of others' technology and innovation. Can't wait to see some Chinese Trabants running around Beijing soon, haha.
        Gik.
        • 3 Years Ago
        @Adrian
        Woah...so all Chinese are thieves. Use a broad brush much? Have you even set foot in China? Wait...you do realize China is the largest holder of US treasury securities yes? I am sure you do. http://www.treasury.gov/resource-center/data-chart-center/tic/Documents/mfh.txt Every one wants a piece of China's economy. Why would China give it away for free? They want something in return. If you run the only grocery store in town with 1bil customers, all these f&b companies want you to sell their products. Wouldn't you want something in return? This is not stealing. It's called doing business. You know who steals? Bernie Madoff.
          Pdexter
          • 3 Years Ago
          @Gik.
          And where is the money coming from, west. Honestly what U.S does to give edge for it's home market or Germany for it's own, is small compared to China.
        BFE
        • 3 Years Ago
        @Adrian
        It's not like anyone was tricked into going to China. They knew exactly what they were doing, and then some. Made a lot of money in the process, too. Sales in China helped GM stay afloat, especially during Carmageddon.
      rmkensington
      • 3 Years Ago
      We should slow their investment in our country and see how well they like that.
        Jason Alan Sipes
        • 3 Years Ago
        @rmkensington
        You can hate on China all you want but this is a good move on their part. We should be doing the same to help our countries industry also. Let alone slow their investment we should stop it and buy back whatever they bought, selling a country our debt hurts our sovereignty as a country.
        mchlrus1
        • 3 Years Ago
        @rmkensington
        We're too shortsighted to do that, same as other countries. We don't realize that China only wants to buy its own domestic goods. This is something American and European countries have lost sight of the importance.
        clquake
        • 3 Years Ago
        @rmkensington
        If they did stop their investment in the US, say goodbye to our federal "budget". No other country has the economic means to buy our treasuries. Our economy would collapse, the 1%ers and politicians would be the only ones able to eat. Social security - gone. Medicaid/Medicare - gone. Unemployment insurance - gone. Homeland security - gone. US Military - gone. The only good thing would be that there's no more TSA to molest people.
      throwback
      • 3 Years Ago
      It was only a matter of time before the Chinese started kicking the foreign companies out. Or at the very least made it so unprofitable to be there that they left, leaving behind their technology.
      IBx27
      • 3 Years Ago
      Bring our companies and their technology the hell out of china!
      Zitao Liao
      • 3 Years Ago
      as a chinese student studying engineering in american college, i felt that the gap in tech between china and other advanced countries are not so easy to fill. talking about japanese or korean, they had been thieves too, but now they have their own tech. so the same process is taking place in china. now back home we have some brands that is as competitive as some international brands..umm...well...personally speaking, i don't like chinese car's design and stuff, but they do own a great share in the market and they are improving in design and engineering. and this movement might be translated in 2 aspects i think: first is to protect domestic industry and second is to slow down the rate of development because growing too fast might cause bubbles and inflation.taking in foreign investment is a strategy that the government used to develop the economy, but now seems to be so fast, so we need take a rest
      dukeisduke
      • 3 Years Ago
      Once they've gotten enough of our technology to become self-sufficient, they'll tell us to get lost. It was short-sighted of American automakers to sell out to the Chinese government. Sure, they've made some profits in the short term, but it will come back to bite them.
        BFE
        • 3 Years Ago
        @dukeisduke
        It's not like they are kicking anyone out. They have contracts, so they'll stay there until those expire.
        rlog100
        • 3 Years Ago
        @dukeisduke
        This is not just automakers, its everyone and its driven by wallstreet.
      • 3 Years Ago
      [blocked]
        aatbloke1967
        • 3 Years Ago
        It depends on whether the parent companies of Suzuki USA and Mitsubishi USA respectively wish to sell off thei subsidiaries, doesn't it?
          aatbloke1967
          • 3 Years Ago
          @aatbloke1967
          Thats irrelevant. If they're performing poorly, why would someone else be interested in buying a licence for products which arent popular? Any prospective Chinese company would be better off simply setting up they're own US subsidiary and setting up it's own dealer franchise agreements, to peddle it's own products. It would be more in Suzukis and Mitsubishis interests to shut down the subsidiary if it is operating unprofitably.
          • 3 Years Ago
          @aatbloke1967
          [blocked]
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