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Tesla Will Be Competing In The Electric Car Industry In China Despite China’s Unfair Trade Policies. This Will Benefit China’s Worldwide Trade

ArmchairPolitiicianChina, October 23, 2017, by Brad Peery,
Blog Site: WWW. ArmchairPolitician.US,

China has unfair trade practices, such as requiring foreign manufacturers to have a Chinese partner, or pay a 25% import duty, if the car is manufactured outside of China. Tesla seems to be unwilling to give away its technology to a Chinese company partner, and perhaps give away 50% of the local Chinese market to them. Tesla has substantial electric car intellectual property, including wireless car batteries, that it will protect by building an electric car manufacturing plant in Shanghai, and avoid Chinese companies stealing their technology.

Batteries, which are a significant portion of the cost of an electric car, will undoubtedly be able to be imported to the Shanghai plant. This will protect Tesla’s electric car battery technology. Tesla will also be able to benefit from the low cost of Chinese manufacturing, by being in Shanghai. This plant will be able to ship to Asian and European markets from this plant, and enjoy the low cost of Chinese manufacturing plants. It will also benefit from the low cost of automobile parts manufactured in China for its export markets outside of China.

China does not allow foreign companies in China to set up manufacturing plants anywhere except in “free trade zones”. One of those free trade zones is Shanghai, where Tesla will locate its plant. There are also ten more such free trade zones throughout China.
*Tesla Plugs In Own China Plant, Wall Street Journal, Tim Higgins, Trefor Moss and Eva Dou, October 23, 2017

China is planning on eventually banning the purchase in China of any car that is not electric. It is requiring any car manufacturer in China to have an electric car model in the next few years. All Chinese car manufacturers will need to have electric car sales in 2019, and have electric cars be 12% or more of their sales in 2020.

China has underway an extensive “Silk Road Trade Network” that will be open to Tesla and others to export their cars to Europe, Asia and other countries, including Russia. Missing from this list of countries served by the network is India, which also has plans to have all electric cars by 2040.

Tesla will likely have large foreign profits overseas that President Trump is trying to develop corporate tax reduction policies that make it attractive for U.S. companies to bring back their foreign profits to the U.S. Hopefully he hopes these funds will be invested in the U.S. to create jobs. This could run up against Chinese currency controls that restrict the movement of money out of China.

China, and their Silk Trade Network, are taking advantage of Chinese unfair trade practices. That network benefits from the use of China’s unfair trade practices at home. These practices cause foreign companies to set up companies in China to access the Chinese market, and transfer their technology to these local companies. This requiring joint Chinese company ventures, allows China to benefit from the expertise of foreign companies and develop a widespread trade network. U.S. companies such as Tesla, Apple and IBM will, through their foreign subsidiaries in China, meaningfully assist China in their global trade ambitions. It is a brilliant scheme to use unfair trade practices to promote Chinese trade, economic and political influence in the region from Europe to Asia and Africa, and use U.S. companies such as Tesla to do it.

ArmchairPolitiicianChina, October 2, 2017, by Brad Peery, WWW.ArmchairPolitician.US,
China’s Unfair Trade Practices Are Evident In Their Electric Car Regulations: What Can The U.S. Do?

See Also:
ArmchairPolitiicianChina, July 27, 2017, by Brad Peery, WWW. ArmchairPolitician.US,
China Is Building A Massive New Silk Road Trade Network: This Will Provide Important Challenges To The U.S.

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