Chinese media reports SAIC Motor has agreed to invest in GM
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STEVE CHIOTAKIS: General Motors will reportedly go through with its initial public offering on Thursday. That’ll mean taxpayers will get some of their money back from the government’s rescue. Now, in China, state media reports the car maker SAIC Motor — a Chinese company — has agreed to buy a big stake in the American automaker.
The BBC’s Chris Hogg is with us now from Shanghai with the latest. Hi Chris.
CHRIS HOGG: Hello.
CHIOTAKIS: Why would the Chinese be interested in buying a stake in GM?
HOGG: Well this is coming from unnamed sources. SAIC isn’t commenting today. But China might be the biggest auto market in the world this year. But the U.S. market is still the most profitable. This is likely an attempt by SAIC to strengthen it’s ties with the U.S. auto maker. Now although some in the U.S. may be uncomfortable with the idea that the Chinese are buying a stake in GM, GM is an international company that has to do business on a global basis, analysts say. The U.S. Treasury of course has been clear that the international investors are welcome to invest in GM.
CHIOTAKIS: Hey Chris — how important is SAIC to GM’s success in China?
HOGG: It’s vital. GM couldn’t sell cars in China without partnering with a local business. Now this deal will need Chinese government approval if it goes through. But the Chinese government ties with SAIC are very close indeed, so that shouldn’t be a problem. GM said earlier this month that it had become the first international car maker to sell 2 million vehicles in a year in China, so this close relationship between these two companies is very important for them.
CHIOTAKIS: The BBC’s Chris Hogg in Shanghai, Chris thanks.
HOGG: Thank you.
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