China warns of anti-monopoly penalty on US carmaker

China is threatening to fine a US automaker for monopolistic behaviour, in what some analysts are calling a warning by Beijing in response to heightened tension with the incoming US administration of president-elect Donald Trump.

Zhang Handong, director of Beijing’s powerful regulator the National Development and Reform Commission’s price supervision bureau, in an interview on Wednesday with the state-run China Daily newspaper, declined to name the company being targeted.

However, he said Chinese investigators had found that the carmaker had given instructions to its distributors to fix prices as far back as 2014.

Analysts speculated that the timing of the interview may have something to do with Mr Trump’s outspoken support for Taiwan.

“The government chose this timing because this is a transitional period for US-China relations,” said Zhong Shi, an independent automotive analyst in Beijing. “By targeting the US automakers from among all the companies out there, China is taking preemptive action to show that Beijing is capable of taking control of trade.” 

However, Mr Zhang said in the China Daily interview: “No one should read anything improper into the timing of penalty decisions or businesses that are targeted,” and emphasised that both Chinese and foreign businesses are being held to account for anti-competitive behaviour.

President-elect Trump a fortnight ago broke nearly 40 years of protocol when he accepted a congratulatory telephone call from Taiwan’s leader Tsai Ying-wen — a move that irked Beijing, which regards Taiwan as an inalienable part of China.

Last weekend Mr Trump went a step further and questioned the One China policy, under which the US withdrew diplomatic recognition of Taiwan in 1979 in favour of Beijing. China hit back, saying that the One China policy was the “bedrock” of relations between the two countries.

An editorial in the same paper on Tuesday urged Mr Trump to consider the importance of close economic ties between China and the US rather than “trying to gain an upper hand in what is essentially a win-win relationship”. 

“History proves that what is good for Sino-US relations is good for their economies,” it said, adding that Chinese customers bought more than a third of the almost 10m vehicles General Motors sold worldwide last year. 

Janet Lewis of Macquarie Securities, a Tokyo-based expert on Asian auto markets, speculated that the target of the fine could be either Ford or GM, both of which are major automobile exporters to China. 

However, both have been aggressively discounting their sales recently, which does not support suggestion of monopolistic behaviour. “The accusation seems dubious given the discounting we have seen,” Ms Lewis said.

GM’s Buick is the best-selling US car brand in China, in third place overall with 5.2 per cent of the market in the first 10 months of 2016, according to Macquarie Research. Ford is ninth with 3.9 per cent while Chevrolet ranks 16th with 2.1 per cent. 

Mr Zhang said the NDRC had evidence that dealers were given instructions by the carmaker in question to fix prices both orally and in emails starting in 2014. 

Anti-monopoly law is still young in China and has in the past invited accusations that foreign companies are unfairly targeted, a charge the Chinese vehemently reject. 

In 2015 US chipmaker Qualcomm was hit with a $975m fine for allegedly anti-competitive behaviour, a charge the company rejected.