China to make American carmaker pay for Trump's Taiwan stance?

General Motors Co. was being investigated for possible antitrust violations, according to people familiar with the matter.
General Motors Co. was being investigated for possible antitrust violations, according to people familiar with the matter.PHOTO: AFP

BEIJING • China's plan to punish a United States carmaker accused of price-fixing is a sign of how Beijing could retaliate if President-elect Donald Trump upends decades of relations between the two nations.

Mr Trump's assertion that the US need not be bound by the policy that Taiwan is part of "one China" would erode a bedrock of US-China ties that has underpinned the vast increase in trade and cooperation between what are now the world's two largest economies.

A rising China has plenty of ways to push back hard if Mr Trump presses on the Taiwan question, which most analysts see as the most sensitive part of the US-China relationship.

The official China Daily newspaper quoted a state planning official as saying China will soon penalise an unnamed US carmaker for monopolistic behaviour.

Bloomberg News said General Motors Co (GM) was being investigated for possible antitrust violations, according to people familiar with the matter.

China is looking at GM's retail-pricing practices, which were also the subject of fines against Daimler and other carmakers over the past two years.

Car industry sources have told Reuters this specific investigation was already under way before Mr Trump's recent comments.

However, the manner in which it was announced, by saying only that it was a US carmaker before a formal announcement of fines, has raised questions about whether officials might be seizing on the case to send a shot across the bow of the incoming Trump administration.

REUTERS, BLOOMBERG

A version of this article appeared in the print edition of The Straits Times on December 16, 2016, with the headline 'China to make American carmaker pay for Trump's Taiwan stance?'. Print Edition | Subscribe