Friday, September 17, 2010

China 'aims to lead world' in eco-friendly cars

From: China 'aims to lead world' in eco-friendly cars - Yahoo! News

China is drawing up a new plan to become a leader in eco-friendly cars that could include forcing foreign automakers to share key technologies for access to its market, a report said Friday.

The draft suggests China could force the technology transfers by requiring overseas firms enter into joint ventures in which they would be limited to a minority stake, The Wall Street Journal said.

Maybe the Chinese are onto something. Their economy is obviously booming, and embracing the green movement gives them a good PR boost. Sure, the foreign car companies are going to bitch and moan about it, but we are talking about an insane potential for profit, so they will at the end go for it. It’s all about the money, they won’t really bitch much about it as long as they make boatloads of cash in the Chinese market.

This of course can’t happen here because we allow any car company in the world to come to the US and build and sell cars here as long as they meet safety testing guidelines. We wouldn’t throw things at these companies like force them to hand over their technology to local carmakers because that would be considered un-American.

There is a trap of course: by licensing this technology, the Chinese car industry can keep pace with the rest of the world without spending money on R&D, which gives them a competitive advantage when you look at things 10-20 years down the road. These companies that out of greed decide to agree with their terms, may end up being crushed 20 years from now when China starts producing luxury cars of similar or higher quality than what Hyundai is selling to us this year. The people that make these deals will probably be rich and retired by the time this becomes a problem, but there is nothing stopping the Chinese from doing such a thing.

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