China to Penalize a U.S. Automaker for Price Fixing

China will soon penalize an unnamed U.S. automaker for monopolistic behavior, the China Daily reported, citing an interview with a senior state planning official. The warning of penalty came from Zhang Handong, director of the NDRC’s price supervision bureau. “The penalty comes as authorities work to step up antitrust oversight and expand the industries they scrutinize in order to promote fair market.” Mr. Zhang said in an exclusive interview with China Daily.

Shares of General Motors Company (NYSE:GM) and Ford Motor Co. (NYSE:F) fell after the news. GM shares fell 2.28 percent to $36.51 while Ford shares was down 0.55 percent in the early trading in New York.

The reported didn’t tell which automaker will be fined and the size of the penalty. The NDRC didn’t reply on the comment immediately. “We are unaware of the issue,” said Mark Truby, Ford’s chief spokesman for its Asia-Pacific operations.

“GM fully respects local laws and regulations wherever we operate. We do not comment on media speculation.” GM said in a statement.

The warning came after U.S. President-elect Donald Trump questioned the longstanding U.S. policy of acknowledging that Taiwan is part of “one China.” China is the biggest vehicle market in the world. More than one-third of GM’s global sales went to China in 2015.  “This action is just a hint as to how much power China wields,” said Michael Dunne, president of Dunne Automotive and a veteran of the Chinese auto industry. “A small fine of several million dollars is likely. The message is, ‘If you want to play, we can play.'”

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