Germany urges China to give fair foreign access to its car market

German Foreign Minister Sigmar Gabriel tells his Chinese counterpart Wang Yi there needs to be clear signal of equal treatment for all overseas firms operating on mainland

PUBLISHED : Friday, 17 February, 2017, 11:38am
UPDATED : Thursday, 23 February, 2017, 5:12pm

Germany wants China to create a fairer business environment for foreign companies, especially German carmakers seeking to tap into Beijing’s drive for greener cars, Foreign Minister Sigmar Gabriel told his Chinese counterpart Wang Yi on Thursday.

German companies have long complained of obstacles to investment and acquiring local firms in China where the government plays a more interventionist role.

Their concerns have acquired greater urgency with the advent of a more protectionist administration in the United States and Britain’s plans to exit the European Union, both issues that could harm German and wider EU commercial interests.

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“China has again promised that it wants to proceed on the path of market liberalisation and reforms,” Gabriel said after talks with Wang in Bonn, where foreign ministers from the G20 top economies are meeting.

“I have as such urged minister Wang that China reinforce that, with clear signals of equal treatment for foreign companies in China, for example in the field of electric mobility,” Gabriel said.

China surpassed the United States last year to become the largest maker of pure electric cars thanks to a raft of government incentives to promote the switch from petrol to electricity as the country battles heavy pollution.

Sales of battery electric and plug-in hybrids increased 60 per cent from January to November to 402,000 vehicles. By 2020, China wants five million plug-in cars on its roads.

Volkswagen signed a deal with China’s Anhui Jianghuai Automobile (JAC Motor) in September to explore making electric vehicles in a new joint venture.

China has its own concerns about what it sees as European protectionism, particularly the EU’s refusal to grant China “market economy status”, which Beijing says is its right 15 years after it joined the World Trade Organisation.

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China’s Foreign Ministry in a statement issued late on Thursday cited Wang as telling Gabriel that China hopes Germany can play a “proactive role” in pushing the EU to grant this.

Despite disagreements with China over obstacles to foreign investment, its massive steel exports and other issues, the European Union increasingly sees Beijing as a crucial ally on global free trade in the face of protectionist pressures from US President Donald Trump’s administration.

The EU, in which Germany is the largest economy, is preparing an early summit with China in April or May in Brussels to promote free trade and international cooperation.