German carmaker BMW is investing more in China as it seeks to avoid tariffs on imported cars. File Photo by Stephen Shaver/UPI | License Photo
Oct. 11 (UPI) -- German carmaker BMW is increasing its investments in China in response to the ongoing U.S.-China trade dispute.
The firm, which already builds several hybrid models in China, said Thursday it is paying $4.2 billion to take over its Chinese operations.
The acquisition will include increasing BMW's stake in its China joint venture from 25 to 75 percent, CNN reported.
The tit-for-tat tariffs being set by the world's two biggest economies has led to escalating prices on U.S.-manufactured sports utility vehicles for BMW.
In September, the company warned of risks ensuing from "continuing international trade conflicts."
Rather than retreating from the Chinese market, BMW is doubling down on its investments, which will include building a $3.5 billion plant in Shenyang.
"China is quickly becoming an important development and production base for BMW new energy vehicles," said BMW chief executive Harald Krueger.
"We are now embarking on a new era."
The company sold 560,000 cars in China in 2017.
BMW's move is being welcomed in Beijing.
Chinese Premier Li Keqiang met with Krueger on Wednesday and said the decision is a sign China has been opening up its economy to the outside world, state paper Global Times reported.
"The [new factory] shows that China is not merely talking about new measures of opening up, but is also implementing them," Li said in statement.
"China will open up wider and at a higher level in the next step, and the country will continue to be a long-term destination for foreign investment."