Media Moves

Coverage: China fines Ford JV $23.6 mln

June 5, 2019

Posted by Irina Slav

Chinese regulators have fined a joint venture between Ford and a local automaker for violating anti-monopoly law.

Brenda Goh and Yilei Sun from Reuters had the news:

China’s market regulator fined Ford Motor Co’s main local joint venture 162.8 million yuan ($23.55 million) on Wednesday for violating anti-monopoly laws, the latest automaker with foreign partners to face such penalties.

The move comes amid an intensifying trade war between the United States and China, and as Washington put Chinese tech giant Huawei on a trade blacklist, raising concerns among U.S. firms that they might be targeted for retaliation.

The State Administration for Market Regulation (SAMR) said on its website that Ford’s joint venture with Chongqing Changan Automobile Co, Changan Ford, had breached the law by setting a minimum resale price for its cars in the Chinese municipality of Chongqing since 2013.

CNN’s Sherisse Pham said the fine comes amid escalation trade tensions between the U.S. and China:

The escalating trade war between the two countries and tit-for-tat punitive actions have sent shivers through the global economy and rattled investors.

After Washington barred US companies from supplying critical software and components to Chinese tech giant Huawei, Beijing announced it was establishing its own blacklist for foreign companies.

Earlier this week the Chinese government said it’s investigating FedEx after Huawei said the delivery company diverted to the United States two packages intended for the company’s offices in China.

The penalty also comes as Ford is looking to make up lost ground in China.

The carmaker announced in April that it plans to launch more than 30 new Ford and Lincoln vehicles in China over the next three years as it tries to reverse a decline in sales in the world’s biggest auto market.

Bloomberg noted this may only be the start:

Though China didn’t spell out any links between the fine and the U.S. tensions, “it’s hard to see it as not related,” said Andrew Polk, co-founder of research firm Trivium China in Beijing. “At this stage I think our baseline assumption should be that there are no coincidences.”

Ford said in a statement that it respects China’s decision and that the venture will regulate operations in the country. Representatives at Changan weren’t immediately available to comment.

With the spat over trade and technology escalating, more companies risk being caught up in the fray. China drawing up a list of what it called “unreliable entities” opens the door to targeting a broad swath of the global tech industry, from U.S. giants like Alphabet Inc.’s Google, Qualcomm Inc.and Intel Corp. to non-American suppliers that have cut off Huawei, such as Toshiba Corp. and SoftBank Group’s ARM Holdings.

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