The Chinese government is doing almost anything in its power – short of prohibiting imports altogether- to give domestic production a serious advantage over U.S. car manufacturers. At the same time, however, state-owned suppliers are receiving quite large amounts of cash to acquire U.S.-based rivals.
As managing director of investment banking firm FINNEA Group, Tim Leuliette, said that last May, the Chinese government earmarked no less than U.S. $60 billion for the acquisition of American companies.
One such case is lithium-ion batteries producer Boston-Power Inc. Last year, GSR Ventures, a Chinese firm with offices both in Beijing and the Silicon Valley, invested US$125 million in the company. GSR’s co-founder Sonny Wu became chairman of the board and now Boston-Power is building a manufacturing plant near Shanghai and a technical center in Beijing.
Boston-Power founder Christina Lampe-Onnerud said that she already works with six Chinese clients and hopes to supply battery packs to Beijing’s proposed EV fleet of 30,000 vehicles.
North America is not the only target; European suppliers are also on China’s shopping list. Jack Perkowski, founder of diesel components supplier ASIMCO Technologies in Beijing, said that manufacturing costs are increasing due to higher wages and that suppliers’ response is to improve their productivity, quality and technology.
“Over the next five years, China wants to transform itself into an innovation leader”, he said. “The suppliers want to be global. That’s a very clear objective.”
Story References: Autonews