Chinese cities drive Renault in diverse directions

30th November 2004, Comments 0 comments

BEIJING, Nov 30 (AFP) - Beijing has been told to stay out of a decision by French automaker Renault SA on the location of a car factory in China, the Financial Times reported Tuesday, citing a senior official.

BEIJING, Nov 30 (AFP) - Beijing has been told to stay out of a decision by French automaker Renault SA on the location of a car factory in China, the Financial Times reported Tuesday, citing a senior official.

"The company has the right to make the decision (itself)," Lin Shusen, communist party secretary of the southern city of Guangzhou told the newspaper.

"The central government should not interfere with the decision-making process." The comments point to an escalating battle between Guangzhou, capital of Guangdong province, and Wuhan in central Hubei province to win the French group's first significant investment in China.

In June, Renault announced it would apply to the central government with local partner Dongfeng Motor Corp to invest in a plant capable of producing 300,000 cars a year.

Beijing, which has final approval over foreign investments, is thought to favour Wuhan as part of its strategy to develop poorer inland regions which have not benefited as much from the country's economic boom, the newspaper said.

Lin said it was "understandable" that the central government wanted the project in Wuhan because of its policy to spur economic development inland.

"But another thing we should consider is that China is now pushing forward (with development of a market economy)," he said.

Guangzhou, which has persuaded Honda, Toyota and Nissan to invest there, wants Renault to bolster its role as one of China's leading automotive production bases.

The newspaper said Renault had sent a letter to the central government explaining how a factory in Guangzhou would allow it to maximize synergies with Nissan, in which the French company owns a 44 percent stake.

"We're waiting for the final decision from Beijing during the first quarter of 2005," Renault was quoted as saying.

© AFP

Subject: French News

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