February 16, 2017 / 1:23 PM / in 9 months

Germany urges fair business environment for its carmakers in China

BONN, Germany, Feb 16 (Reuters) - Germany wants China to create a fairer business environment for foreign companies, especially German carmakers seeking to tap into Beijing’s drive for greener cars, Foreign Minister Sigmar Gabriel told his Chinese counterpart Wang Yi on Thursday.

German companies have long complained of obstacles to investment and acquiring local firms in China, where the government plays a more interventionist role.

Their concerns have acquired greater urgency with the advent of a more protectionist administration in the United States and Britain’s plans to exit the European Union, both issues that could harm German and wider EU commercial interests.

“China has again promised that it wants to proceed on the path of market liberalisation and reforms,” Gabriel said after talks with Wang in Bonn, where foreign ministers from the G20 top economies are meeting.

“I have as such urged minister Wang that China reinforce that, with clear signals of equal treatment for foreign companies in China, for example in the field of electric mobility,” Gabriel said.

China surpassed the United States last year to become the largest maker of pure electric cars thanks to a raft of government incentives to promote the switch from petrol to electricity as the country battles heavy pollution.

Sales of battery electric and plug-in hybrids increased 60 percent in January-November, to 402,000 vehicles. By 2020, China wants 5 million plug-in cars on its roads.

In September, Volkswagen AG signed a deal with China’s Anhui Jianghuai Automobile (JAC Motor) to explore making electric vehicles in a new joint venture.

Despite disagreements with China over obstacles to foreign investment, its massive steel exports and other issues, the European Union increasingly sees Beijing as a crucial ally on global free trade in the face of protectionist pressures from U.S. President Donald Trump’s administration.

On Wednesday Reuters exclusively reported that the EU, in which Germany is the largest economy, was preparing an early summit with China in April or May in Brussels to promote free trade and international cooperation. (Reporting by Sabine Siebold and Andrea Shalal; writing by Joseph Nasr; Editing by Gareth Jones)

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