Economics, Politics and Public Policy in East Asia and the Pacific
Author: G.E. Anderson, UCLA
Last October I wrote about a situation in which BYD, the private automaker from Shenzhen, was punished for attempting to build a factory on farmland near Xi’an.
BYD was fined about US$435,000, and seven buildings, on which it had already begun construction, were confiscated and ordered to be destroyed. Read more…
Author: G.E. Anderson, UCLA
China is well-known for state direction of the economy, and China itself does not really try to hide the fact that its most important industries are dominated by state-owned enterprises. Among these industries are airlines, telecoms, banking, finance, steel, mining, shipping, petroleum and, yes, automobiles.
A good mix of Chinese and foreign auto companies sell ‘energy-saving’ cars that are eligible for consumer subsidies of 3,000 yuan per car (see my earlier post). Curiously though, the best selling small sedan in China, BYD’s F3, doesn’t appear on the list. Read more…
Author: GE Anderson, UCLA
Just when you think you have it all figured out. The Bank of China, one of China’s Big Four state-owned banks, has been busy funding auto companies this week.
The Bank announced this week that it has approved a 20 billion yuan ($2.9 billion) line of credit for Beijing Auto Industry Holding Corp (BAIC). Some are speculating that this money may be used by BAIC in its continued pursuit of an overseas purchase, most likely Saab, or at least some of its assets.
BAIC is owned by the local Beijing government, so the fact that Bank of China is providing funds should not come as a big surprise. Bank of China and BAIC are both state-owned.
But BAIC is not the only Chinese auto company to get funding from Bank of China this week.
Author: G.E. Anderson, UCLA
Australia’s government announced on August 4 an easing of foreign investment rules. The rules have apparently come under criticism recently for causing delays that may be overly burdensome to foreign investors.
One recent deal, the proposed purchase of a controlling interest in Aussie miner Rio Tinto by Chinese metals company Chinalco, was cancelled during Australia’s review process. According to Reuters, some critics have complained that the delay caused by Australia’s review process injected doubt and uncertainty, possibly causing Rio to cancel the deal before a decision was rendered. There is, of course, no evidence to support this speculation.
Author: G.E. Anderson, UCLA
A few weeks ago, Chinese Premier, Wen Jiabao paid a visit to Geely’s automotive factory in Hunan Province. Despite the fact that Geely is not a state-owned enterprise, this visit is not all that surprising. State leaders all over the world pay visits to privately owned businesses from time to time.
In the photo below, standing behind Wen’s right shoulder is Li Shufu, founder, Chairman and controlling shareholder of Geely.
What makes Wen’s visit interesting, however, is the fact that Wen’s government itself directly and indirectly owns or controls several competing auto manufacturers. Wen also had some interesting things to say while there: