China probing, may fine General Motors for antitrust violations

WASHINGTON, Dec. 15 (UPI) -- China is gearing up to fine General Motors for price-fixing at it's retail operations and impeding competition, which some are linking to President-elect Donald Trump's criticism of the country and demand for a new trade deal.

Chinese officials told China Daily they plan to issue a fine to an "unnamed automaker" in order to promote fair market competition amid an effort to treat foreign and domestic businesses equally.

Shares of General Motors fell $1.41, or 3.77 percent, on Wednesday, closing at $35.95 as word got out China would fine a U.S. automaker. Late Wednesday night, Bloomberg reported GM was the target of the fine after being investigation since August.

"GM fully respects local laws and regulations wherever we operate," the company said in a statement to the Detroit Free Press. "We do not comment on media speculation."

China has used its antitrust laws to moderate the performance of foreign companies and protect its own, especially in regard to its car industry. In the last two years, Mercedes-Benz, Volkswagen and Fiat Chrysler Automobiles for similar pricing practices.

"The Chinese government wants to protect its own companies," said Stuart Malawer, a professor of law and international trade at George Mason University. "The antitrust laws have been used periodically to target foreign auto companies. In the last few weeks, the Chinese government has taken a more aggressive position because of Trump's proclamations."

The move comes as the latest in a series of responses from China to Trump's criticism of the country's trade practices, which he says give the country an unfair advantage and have harmed the United States, and his questioning as to whether he is required to follow the long-adhered-to "One China" policy with regard to Taiwan.

Regardless of China bristling at Trump's statements, some experts point out the Chinese auto industry has not been in good shape and the crackdown on foreign companies could have been inevitable.

"If you didn't have the Trump phone call to Taiwan this might have happened anyway," said Linda Lim, a professor of business strategy at the University of Michigan. "Car prices in China have been falling for a while now because of the weaker economy."