By on June 6, 2019

China has fined Ford Motor Company’s main joint venture in the country, Changan Ford Automobile Co., over antitrust violations. However, the more likely scenario is that the People’s Republic is trying to flex some muscle after the Trump administration declared a ban on doing business with Huawei, the world’s largest telecommunications provider, on national security grounds.

The oversimplified gist of the situation is that America doesn’t trust a telecom firm with direct ties to the Chinese Communist Party that could easily be tapped by the Chinese government for espionage. Several countries banned Huawei equipment earlier this year after the U.S. Justice Department unsealed a raft of indictments, included 23 counts pertaining to the alleged theft of intellectual property, obstruction of justice, and fraud relating to sanctions against Iran. 

Claims exist that researchers have found hidden backdoors in Huawei equipment that could be used for spying. Meanwhile, the Chinese company has repeatedly denied any corporate wrongdoing, launching a sugary sweet marketing campaign as rumors swirl that its staff is temporarily forbidden from attending meetings in the United States.

It’s a lot to unpack, but China’s response to America’s suspicions appears to involve faulting companies like Ford and FedEx with minor infractions.

According to Bloomberg, Changan Ford will be fined 162.8 million yuan (about $23.6 million) for allegedly restricting retailers’ sale prices in the southwestern city of Chongqing since 2013. Confirmed by the State Administration for Market Regulation, China said the fine is equivalent to 4 percent of Ford’s annual sales in Chongqing.

From Bloomberg:

The announcement comes just days after China said that it’s investigating FedEx Corp. for “wrongful” deliveries, a move framed by the state news agency as a warning by Beijing after the Trump administration declared a ban on business with telecommunications giant Huawei Technologies Co. China has also threatened to blacklist foreign firms that damage domestic companies’ interests and on Tuesday warned its citizens against travel to the U.S.

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.”

It’s relatively small potatoes for Ford, but warning lights are likely going off inside every automotive HQ on the planet. As tensions grow between China the United States, the People’s Republic is busy assembling a list of “unreliable entities” that the country could simply decide to stop doing business with at the drop of a hat. This could prove a pretty powerful tool in the trade war, encouraging more businesses to play ball — especially if they make said list.

And yet distrust lingers. While most carmakers are hungry to burrow themselves deeper into China, most probably remember the fines levied on General Motors’ venture with SAIC Motor for similar antitrust violations in 2016 and the seemingly intentional customs holdup of Mercedes-Benz SUV assembled on U.S. soil in 2018.

[Image: Ford China]

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30 Comments on “China Fines Ford Over Supposed Antitrust Violations, Assembles List of ‘Unreliable Entities’...”


  • avatar
    rpol35

    “This could prove a pretty powerful tool in the trade war, encouraging more businesses to play ball — especially if they make said list.”

    Problem is it’s China’s ball and their rules. Something’s gotta give.

  • avatar
    ToddAtlasF1

    I weep for the companies that offshored US jobs. This is all so unfair.

    • 0 avatar
      Robbie

      Companies should be allowed a stable business environment. Offshoring labor intensive work abroad and America focusing on high-tech, high value added economic activities is what we want.

      The day when American workers will sow clothes again… that will be the day when America has become Bangladesh.

    • 0 avatar
      redapple

      TODD

      Right on! Lot said with an economy of words.

    • 0 avatar
      civicjohn

      Todd, nobody has a crystal ball for this stuff, but I agree completely with your statement.

      The rush to offshore production may have saved some of us money over the years buying cars, but one can only look backwards and see how devastating it has been to the US economy. I’ll toss some blame at the UAW, they got really greedy, and so management thought they were making great business decisions by moving production.

      In the end, they both are screwed. It will be interesting to see how the latest entrant to the Chinese market, Tesla, will succeed or fail. If they plan on that factory only to supply the Chinese market, watch how quickly every other Chinese EV manufacturers have the same technology. With the threat of the Chinese to withhold rare earth materials, it will get more interesting. The irony of that is that we mine rare earth materials in the US but send them to China for refinement, because it’s such a nasty polluting process that we can’t do it in the US.

      • 0 avatar
        JimZ

        sure we can, we’re building three plants to do it right now. it’s historically been *too costly* to do it here compared to China because we actually expect producers to not just dump waste products wherever the hell they want.

    • 0 avatar
      ect

      Offshored US jobs? Not in this case. The cars made by Changan Ford are sold in China, not exported to the US. Ford does, however, also export some vehicles from the US to China.

      But then, I suppose facts don’t matter when you’ve got an ideological bias to promote…

      • 0 avatar
        TrailerTrash

        well…but, “but warning lights are likely going off inside every automotive HQ on the planet.” means there is something more than just those stay in china cars is being discussed here, right????

        and i do agree that the earlier decisions made, although made easier due to political decision here in the usa, are coming home to roost.

        not blaming corporations alone as their decisions many times are made to make use of every tool and law available, or they would be negligent to their shareholders.

        but no matter the hatred and plain old idiocy people hold against trump, this china game is long over due.

      • 0 avatar
        ToddAtlasF1

        Oh the irony. Even cars made here have quite a bit of Chinese content. Facts don’t matter to people with TDS; forcing them to favor child slave labor in Cobalt mines, massive environmental harm in countries where we’ve exported our industries to escape EPA regulations, claims that the job losses are due to automation when entire factories have been idled and replaced with ones in countries with lower labor costs, and global shipping of everything from produce to cheap consumer products while ships spew more greenhouse gases than the AGW proponents’ private jets do. You wouldn’t know what a fact was if a lie caused you physical pain at this point.

        • 0 avatar
          ect

          OK Todd, here are facts. Since NAFTA was signed, US manufacturing output (in constant dollars, so with inflation taken out) has doubled (Bureau of Economic Analysis).

          During the same period, direct manufacturing employment has fallen by 1/3 (Bureau of Labor Statistics).

          Yes, automation has been busy killing unskilled manufacturing jobs, just as it killed unskilled agricultural jobs a century ago, Now, as then, technology has created more jobs than it has destroyed, but they require more skill. So, we now have skilled jobs going begging while unskilled workers are begging for work.

          But once again, apparently facts don’t matter to those who have ideological biases to promote.

          • 0 avatar
            ToddAtlasF1

            Do you know what a trade deficit is? If you’re so clever, why do you fall for the obvious deception that says it’s a good idea to offshore the jobs that our public school victims are actually qualified for?

          • 0 avatar
            JimZ

            a trade deficit happens when it’s *still* cheaper to pay Chinese factory workers a pittance than to have American workers babysit robots. Someone as obviously smart as you should understand that.

          • 0 avatar
            ToddAtlasF1

            The auto industry is being ‘revolutionized’ in the name of reducing greenhouse gases while we ship everything around the world to save a few bucks on robot babysitters? Do you have any idea of the pollution produced by container ships? Both real pollutants and greenhouse gases are spewing in order to redistribute the US middle-class’s wealth. What do you think mass migration from countries with no industrialization to western nations does to the carbon footprints of the people who are being trafficked? Seems like a pretty odd practice to enforce if one believes in AGW, doesn’t it? Do you ever think, or are you simply a vessel for the lies you’re given to proliferate?

          • 0 avatar
            JimZ

            you don’t give one whit about pollution or greenhouse gases. you’re just a worthless concern troll at this point.

          • 0 avatar
            ToddAtlasF1

            I’m pointing out that you’re carrying water for liars. I do care about actual pollution. I don’t care about greenhouse gases because unlike you I can think.

            Your slip into ad hominems is a transparent dodge of your inability to refute anything I wrote. What do you suppose your masters are really after if it isn’t stabilizing the climate or efficient use of resources?

          • 0 avatar
            JimZ

            conspiracy theorists always believe they’ve outsmarted everyone else.

          • 0 avatar
            ToddAtlasF1

            Refute what I wrote or accept that you’re the one who believes in fairy tales.

  • avatar
    vent-L-8

    EXACTLY. Growing up in ohio and Michigan in the 70s and 80s we were hit with a devastating series of plant closing and were told there wasn’t a blessed thing we could do about it. I frankly love watching these companies squirm.

    Free trade only works where both countries have the same standard of living. This kind of trade is good for everyone – the competition benefits the buying public etc…

    Open trade with a country that has a lower stand of living only serves to trade your manufacturing base for cheap goods.

    In the meantime I’ll enjoy the chicken roosting festivities.

    • 0 avatar
      Robbie

      For every Iphone made in China, $8.46 stays in China, and $500-$600 profit goes to the US (Apple). Every undergrad student China sends to the US for a single year leaves $70K or so in the US. That means 8200 Iphones need to be produced to send a single Chinese student to the US for a year.

      Have you ever walked around a US university campus? And you guys want to stop trade with China?

      • 0 avatar
        ajla

        “And you guys want to stop trade with China?”

        Is there anything a nation could do where you would decide to stop trading with them? Sometimes things go beyond pure economics. I don’t think the Chinese government is made up of people we should be doing heavy business with *even* if that ends up hurting the US GDP.

        And yes, there are unsavory places aside from China where I think the US should stop making deals as well. But, one step at a time.

        • 0 avatar
          FormerFF

          i can see the point of just telling China that well, we tried but our systems aren’t compatible, and no hard feeling, but that we should just work towards disengaging from each other over the next 10 years.

      • 0 avatar
        ToddAtlasF1

        Unless you’re a major Apple shareholder, you have to be completely brainwashed or brain-dead to think this is an argument for our trade relationship with China. I hope you were well compensated for your soul Robbie.

      • 0 avatar
        Raevoxx

        That includes the absolutely ginormous, impenetrable SWARMS of Chinese and Korean hopefuls, and tourists.

    • 0 avatar
      JimZ

      “EXACTLY. Growing up in ohio and Michigan in the 70s and 80s we were hit with a devastating series of plant closing and were told there wasn’t a blessed thing we could do about it. I frankly love watching these companies squirm.”

      a lot of those plants would have closed anyway. it simply doesn’t take as many people in the plant to build a car. automation has done as much or more than offshoring to kill demand for manufacturing labor. I’ve been in assembly plants where the body shop (where the body panels get welded together) and in many cases, there don’t need to be more than a handful of people working it. you feed in parts to the carriers and robots pick, place, and weld them together.

  • avatar
    Robbie

    The US has lost low value added manufacturing jobs. This is a bit like hiring someone to paint your house when your income goes up. Your time has become more valuable.

    I suggest that we all dread the day when sowing T-shirts is done in the US again. That means that Bangladesh can focus on high tech activities, and is letting us do the cheap manual labor.

    • 0 avatar
      Hummer

      My underwear are all made in America cityboxers,con and they’re worth every penny over the cheap 3rd world crap in every department store. As good as the ones grandma made when we were all little.

      I look forward to the day I can find multiple styles of all my clothes all made here. I can leave my house with every article of wear made here, I just wish everything I had was that way.

      Thought I still don’t believe the jeans made in downtown Raleigh are really worth $350 a pair.

    • 0 avatar
      sfredst

      For a country to have a strong military – and since we are mostly responsible for a large part of the security around the world – it must have a strong manufacturing base that includes raw materials processing. China has had a long term strategy interrupted by Trump, and that was to weaken the US from both a military and economic standpoint. If you think other cultures are our friends, you are wrong. They are our enemies. Any evidence to the contrary is to fool the foolish.

      • 0 avatar
        aja8888

        A lot of people here (and elsewhere) seem to forget that the Chinese are Communists. Look how they treat their people and you will see what I mean.

        • 0 avatar
          JimZ

          “A lot of people here (and elsewhere) seem to forget that the Chinese are Communists. ”

          AHAHAHAHAHAHAHAHAHA

          yeah, and the “Democratic People’s Republic of Korea” is a democracy.

          • 0 avatar
            onyxtape

            “Chicoms”/red menace fits well with the 70s / 80s economic and fiscal viewpoints that are all the rage around here and in DC these days.

            Blame automation. Even in the early 90s, I remember reading a story about how Sony laid off a bunch of people and consolidated their physical CD media plant to one factory in New Jersey. Apparently, it took fewer than 300 workers to supply 70% of the world’s CD media needs.

            Automation is the job killer in a scale that cannot be compared to any other country. My engineer peers at Amazon have the kind of robots in development that will probably lay off a huge load of warehouse workers within the next 5 years – and they’re already probably 5-10 years behind the Chinese e-tailers in their technological development.


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