SCDigest Editorial Staff

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This summer, the US Chamber of Commerce issued a statement saying that China's policies are "forcing foreign technology companies to anguish over balancing today's profits with tomorrow's survival." What Do You Say? Click Here to Send Us Your Comments Click Here to See Reader Feedback

The increasingly touchy relationship between many Western and Japanese companies and China may be about to take a new turn, as the Wall Street Journal reported last week that  China's Ministry of Industry and Information Technology was developing plans that would force foreign car makers to turn over advanced technology for building electric cars and batteries as a precondition getting access to the potentially vast Chinese market.

The China's Ministry is said to be developing preparing a 10-year plan with the specific goal of building China into "the world's leader" in developing and producing battery-powered cars and hybrids. The news comes from sources inside several foreign car manufacturers that have seen copies of the draft policy documents.

The proposal as it stands now would limit foreign car makers in the Chinese market to a minority stake in joint ventures with Chinese companies.

The plan is just one of many initiatives designed to thrust China into the lead in a wide ranging number of  "green" technologies to keep its export machine humming as these new markets develop globally. According to the WSJ's sources, the proposed policy supports a government strategy of  building three to five Chinese companies into globally competitive makers of all-electric cars or plug-in hybrids by 2020, as well as development of two to three global suppliers of key supporting technologies such as advanced batteries and electric-motors.

While the new policy is not official, and it is possible the Chinese government leaked parts of the idea to test reaction and ultimately settle for a less onerous but still attractive deal for its auto industry, reaction from many has been swift and strong.

Yesterday, long-time Detroit area Congressman John Dingell sent a stern letter to China's US Ambassador which noted in part that the policy would  "violate the sanctity of the intellectual property laws we hold so dear in the United States and amounts, in my estimation, to a violation of China's obligations as a member of the World Trade Organization."

Leaders of Western countries and companies have been increasingly critical of the lack of protection for intellectual property rights for them in China and the heavy-handed requirements the Chinese government places on foreign companies in many product areas to access its markets.

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