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Old 19th September 2010, 21:27   #1
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Default China and its arm-twisting policies

The Chinese government is really playing its cards right.What they want they will get it no matter what.

What its wants?
To be the largest producer of hybrids and electrical vehicles by 2020.They have aimed to manufacture 3 miliion of these per annum by then

How they will get it?
They are going to introduce a new policy measure which compels any foriegn manufacture who wants to build hybrid cars and electric vehicles in China to do so only through a JV with a Chinese manufacturer where the foreign company will hold only a 49% stake thus a minority and will have transfer key technologies and intelectual property to the local company.

So why should other manufacturers agree?
Simple China is right now the largest car market in the world, with no where near saturation levels.It is the market where all major car makers make a huge amount of profit.Especially after the financial meltdown when growth in developed markets have dried up China is the place where everybody wants to be.

Car executive heads are cribbing,but like it mentioned in the article companies will "have to chose between todays profit,to tomorrows survival"

There is no doubt china will have its way considering the fact that it has announced a huge budget of 69,000 crores($15 billion) to build a sophisticated charging and electrical infrastructure thus providing a large market for electric/battery cars.And eventually they said they want to create a 3-5 chinese global car hybrid/electric manufacturers.

Just goes to show how much clout China has these days.

Last edited by avishar : 19th September 2010 at 21:35.
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Old 20th September 2010, 12:35   #2
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Actually it shows how much the politicians in China can think and the foresight they carry.

Indian politicians are busy squabbling over Marathi Manoos and Ram Jamnbhoomi etc.
Do you really expect any long socio-economic thinking being done here?
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Old 20th September 2010, 16:11   #3
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Look at high speed trains. China arm twisted Hitachi and now are cleaning the world with better value trains
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Old 20th September 2010, 17:12   #4
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They care a scant about IP and will use these opportunities to "learn" (read steal) the technology and sell their version globally at tenth the price.
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Old 20th September 2010, 19:02   #5
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Yes thats exactly what they intend to do.I am sure within a decade all these JVs will be bought out by the local companies who now have the requisite technology and then export it cheaply all over the world.

In India's case the government did not even have a proper rules and regulations for hybrid vehicles when Honda wanted to sell the civic hybrid.The rule had to be literally written.

I think in a way this is beneficial to all those developing countries who cannot afford the "clean" technology of the west.The west can cry themselves hoarse for china to devalue its currency,but as long they are sitting on a pile of US bonds they cant be bullied.They will have their way.
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Old 21st September 2010, 19:05   #6
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Think of it this way. In addition to battery technology, what is the single largest constraint faced by hybrids & electric vehicles? COST! And who can mass-produce at a cheaper rate than China?

Matching the latest battery tech (from their partners) with their low cost of production is a killer combination. I've said it before and will say it again; watch out for the Chinese. They are going to be the Big Daddy of the automotive world.
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Old 27th September 2010, 16:54   #7
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We got cheap phones from China - the ones without IMEI. We are still cleaning up the mess of untracked handsets and blasts in this country.

Not everything that come from Chinese manufacturers (not US/ European companies manufacturing in China) is of good quality. Cheap yes, quality doubt it.

Sure they are good at 'copying' things - will I buy an unbranded bag from them yes. Will I trust an unbranded car battery - maybe not.
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Old 27th September 2010, 17:22   #8
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China progresses but at a huge human cost. There is a lot happening in the country which we will never see. Every coin has two sides.

Not that Indians progressed much but I will be more comfortable staying in India rather than to be in China. Their mad experimentation with policies have extracted a huge human cost.

We Indians were very fortunate that intial set of leaders we got after independence were well educated.

Just browse through wikipedia on these to get a true picture of what chinese have gone through:
Cultural Revolution - Wikipedia, the free encyclopedia
Great Leap Forward - Wikipedia, the free encyclopedia
Great Chinese Famine - Wikipedia, the free encyclopedia
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Old 27th September 2010, 18:57   #9
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There is nothing wrong in the policy of the Chinese. In fact it is a very smart move. China made no bones about the fact that domestic OEMs like Geely, SAIC, Dongfeng, etc., do not have the technical know-how to compete global (European and North American) OEMs on internal combustion engine (ICE) technology, hence they want to be the global leaders in the battery-powered electric powetrain.

China has the most important things that would make it the leader in electric powertrain
1) Government willingness and support
2) Natural resource - Lithium deposits
3) Battery technology expertise. BYD is a the mai-baap of Li-ion technology for mobile phone batteries. The ones you see in your Nokia and Motoroal phones are made by them. Now BYD Auto will introduce the E6 battery-powered electric vehicle.
4) Competitive labour prices and availabilty of human resources.

They want to define the EV landscape, and they will. Other OEMs are well aware of it and they have no choice but to relent, because besides providing volumes, China will also increasingly define the nature of the automotive industry.

The sad part, however, is the fact that India could have acted before China did, but we were, and still are, fast asleep. I talked about how Reva could have been the poster child for India's EV program in the new-gen Reva spotting thread; but the government is not even aware of the fact and the potential the decade-and-a-half-only-production-EV offered.

I say, well done China!
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Old 27th September 2010, 19:10   #10
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Quote:
Originally Posted by avishar View Post
The Chinese government is really playing its cards right.What they want they will get it no matter what.

...
So why should other manufacturers agree?
Simple China is right now the largest car market in the world, with no where near saturation levels.It is the market where all major car makers make a huge amount of profit.Especially after the financial meltdown when growth in developed markets have dried up China is the place where everybody wants to be.

Car executive heads are cribbing,but like it mentioned in the article companies will "have to chose between todays profit,to tomorrows survival"

...
Just goes to show how much clout China has these days.
I think its not just China, many other countries which has a bargaining power such as a large market will do this. India does this for defense equipments manufacturing, power plants and probably in some other segments as well. It's plain business sense and I dont understand why foreigners feel it is arm-twisting. Aren't the Americans doing this for ages? Is it that only they are supposed to do it and not any Asian country? Now the world is ours. Let us make the best out of it.
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Old 27th September 2010, 19:39   #11
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They still arent a democracy and when it eventually happens it will bring in a totally different set of problems which they will have to eradicate.
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Old 27th September 2010, 20:08   #12
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True that the Chinese leadership is far more thinking than the jokers we have at centre and state.
Chinese have vision and plans to achieve it (not all will agree with the ways though). Atleast there is translation of vision to action. Something totally lacking in our country.

Last edited by LonelyPlanet : 27th September 2010 at 20:12.
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