Geely Chairman Faults China’s Auto Industry Partnerships

China's practice of forcing foreign carmakers to operate through 50:50 ventures with domestic producers isn't helping the country's auto industry, declares Zhejiang Geely Holding Group Co. Chairman Li Shufu.

Li tells the Financial Times the policy makes China's carmakers complacent because they enjoy half the profits of a company whose success is generated by demand for the foreign partner's brands. "Chinese companies," he says, "do not have to think about whether they [need to] do something to enhance their competitive edge."

One goal of government mandated ventures is to help transfer technology to the country's domestic carmakers, presumably to help them become world-class producers. But that is not happening, the FT says. The newspaper notes that China's local brands remain obscure.

China's domestic nameplates continue to struggle with a shrinking share of their home market, which analysts say illustrates their lack of competitive strength.