Politics | China to slap penalty on US carmaker, says report
Workers assemble cars at a workshop in Shenyang,  Liaoning province. Photo: AFP
Workers assemble cars at a workshop in Shenyang, Liaoning province. Photo: AFP

China to slap penalty on US carmaker, says report

A senior Chinese official insists no one should ‘read anything improper in the timing of the move,’ which is part of a government crackdown

December 14, 2016 10:26 AM (UTC+8)

China will soon slap a penalty on an un-named US carmaker for monopolistic behaviour, the official China Daily newspaper reported on Wednesday, 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 (NDRC) 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.

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 and Ford Motor.

“We are unaware of the issue,” said Mark Truby, Ford’s chief spokesman for its Asia-Pacific operations.

GM did not immediately respond to requests for comment.

Comments unsettle companies

In a separate editorial, the China Daily urged Trump to recognise 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, but now fear retaliation by Beijing if Trump were to act.

The penalty is part of 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 carmakers since the commission began anti-monopoly investigations in 2011, the newspaper said.

Targeted firms have included Audi, Daimler’s Mercedes-Benz and Toyota Motor, and one of Nissan Motor’s joint ventures.

In 2011, China imposed duties of up to 22% 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.

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