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The USA, the European Union, Canada, Turkey and some other countries have recently announced the introduction of additional duties on cars imported from China. To avoid the restriction, many Chinese automakers are now considering building local factories. However, China's Ministry of Commerce warned them against rash investments in other countries.
According to Bloomberg and Reuters, the meeting between officials and representatives of China's automobile industry took place back in July, but the first details about it have emerged only now. Internal sources said that the main topic was the deployment of Chinese car production in other countries.
After all, such a step will not only help companies avoid import duties, but also increase exports, reducing total dependence on the overheated domestic market with its fierce price wars. China's Ministry of Commerce takes a different view and has reminded automakers of the potential risks of building factories abroad.
The main fear is "geopolitical instability". For example, the authorities of the People's Republic of China directly urged not to invest in enterprises on the territory of India. Probably, the reason for this decision was not only the border conflict between the states, but also the problems of the SAIC concern in this country. The Chinese state-owned company has been experiencing difficulties in working in India for many years: back in 2022, it came under investigation for financial fraud and was forced to reduce its stake in the Indian branch of the MG brand.
China's Ministry of Commerce also "strongly advised" not to invest in Turkey and Russia. In the first case, BYD has already signed an agreement with the Turkish government on the construction of a plant. Just before that, Turkey itself introduced a 40 percent duty on Chinese electric cars, so it is not surprising that the PRC saw such a move as blackmail. As for Russia, the reason is simple — the fear of secondary sanctions.
Chinese officials were more reserved about the idea of building factories in the European Union and Thailand. However, even when organizing production in these countries, the Ministry of Commerce of the People's Republic of China recommended limiting the assembly to Chinese SKD kits. In this way, officials want to keep the production of critical components inside China and at the same time prevent the leakage of advanced technologies to other countries.
