Why China's auto industry should be grateful for Trump

Yang Jian

Automotive News | 2018-12-14

SHANGHAI -- If there is a vote for the Person of the Year in China¡¯s auto industry for 2018, no other person is as worthy of the title as U.S. President Donald Trump. 

Trump¡¯s tariffs and trade war have added to the troubles facing the Chinese economy and prompted a large number of local consumers to cut spending and delay new car purchases. 

But the responses the trade posture have elicited from Beijing and global automakers, either intended or unintended by Trump, are conducive to the industry¡¯s healthy development over the long term.
Facing Trump¡¯s trade threats, the Chinese government agreed to do in May what global automakers have long hoped for: remove restrictions on foreign companies producing vehicles in China.
The deregulatory move produced quick results: In July, U.S. electric vehicle maker Tesla Inc. received approval to build a wholly owned assembly plant in Shanghai, its first product site overseas.
Through talks on the sidelines of the Group of 20 summit in Argentina this month, Trump and Chinese President Xi Jinping agreed to a 90-day truce in the trade war.
The deal allows the two sides to negotiate an agreement on how to address U.S. complaints about Chinese trade practices such as intellectual property theft, nontariff barriers and forced technology transfer.
By contrast, the end results that the tariffs and trade war threats have brought to the local auto industry are generally benign.
By prompting Beijing to lessen control of foreign companies producing locally and slash tariffs on vehicle imports, Trump has helped to level the playing field in the Chinese market for global automakers.
Nobody other than Trump has done so such for the well-being of China¡¯s auto industry in 2018.

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