China makes BMW the envy of foreign carmakers, giving it green light to raise its venture stake

BMW has received the green light to raise its stake to 75 per cent of its onshore venture, becoming the first foreign manufacturer to get a super majority control, in a move by the Chinese government to engender envy among American businesses amid the Sino-US trade war.

“We will sign an agreement or a contract if you’re ready,” Chinese Premier Li Keqiang said on Monday during a meeting in Beijing with European Union politicians and business leaders that included BMW representatives, according to a Bloomberg report.

Munich-based BMW would not comment on the plan to raise its stake in the venture, but said in a statement that the strategic positioning of both shareholders will be further improved.

Is Tesla’s Shanghai plant announcement a matter of auspicious timing?

The Chinese leadership’s approval of BMW’s plan came a week after Tesla, the bestselling US electric carmaker, signed an agreement with the Shanghai government to build its first overseas assembly plant at Lingang, an areas close to the city’s free-trade zone, with an annual capacity of 500,000 units.

The simmering Sino-US trade war has raised concerns about China’s economic outlook and business prospects for multinational firms operating on the mainland. To allay such concerns, Beijing is handing out concessions to global companies to maintain their investment in the world’s second-largest economy.