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Warning over Chinese trade

Asian silhouette: The Hong Qi clearly gets its inspiration from the Rolls-Royce Phantom.

Copycat designs and other issues need addressing in free trade talks, warn FCAI

General News logo18 May 2005

By NEIL MCDONALD

PIRATED cars and intellectual property rights are emerging as key concerns of the local automotive industry as Australia enters free trade negotiations with China.

The peak industry body, the Federal Chamber of Automotive Industries, also believes that unless clear guidelines are laid down, the emerging Chinese automotive juggernaut could create issues for our multi-billion dollar spare parts industry.

FCAI chief executive, Peter Sturrock believes any FTA negotiations with China needed to "address a wide range of tariff and non-tariff issues affecting access to the Chinese market for automotive products and services".

Protecting intellectual property rights is one of a range off issues the FCAI is concerned about.

It also believes corporate governance, accounting practices, copyright and broad-ranging commercial activities also need attention.

"Where copyright is protected we need to make sure it is protected and we need to make sure Chinese officials have suitable arrangements in place to take action against companies who infringe," Mr Sturrock said.

Such matters are "a key concern for many companies looking to do business with China", he said.

"In our industry, among other industries, are concerned that there appears to be frequent activity of Chinese manufacturers copying products," he said.

"We simply want to alert people that this matter needs to be a high priority in terms of the negotiations to remind the Chinese government officials that we are seeking them to take firm action within their own sovereign rights as to issues of piracy, protecting intellectual property rights and not turning a blind eye to these issues." Any agreement must be able to provide the Australian industry with strengthened mechanisms to allay these concerns, he said.

"China is already the third largest automotive market in the world and the pace of recent expansion is set to continue," he added.

In response to last week’s Federal Government announcement of forthcoming FTA negotiations with China, he urged the government to continue to consult closely on all relevant issues.

Mr Sturrock said any FTA must deliver tangible benefits for Australian industry. However, despite its initial concerns, the FCAI believes opportunities exist for Australian industry to take advantage of the growing Chinese market.

"There should be no illusions, there are some difficult issues to be addressed in these negotiations." Although the car industry supported a successful outcome, Mr Sturrock warned that "we should not overlook the potential risks and competitive challenges that lie ahead".

The Chinese auto industry is known globally for its copycat cars, some of which have been at this year’s Shanghai show.

First Automotive Works, for example, unveiled its Hong Qi – Chinese for Red Flag – limousine, which shares some styling cues with the Rolls-Royce Phantom (below).

 center image In the past, the piracy issues have prompted General Motors and Honda to mount legal challenges against Chinese car-makers for allegedly copying their own products.

Last year, GM famously challenged the Chery company for a copycat version of its Matiz called the Chery QQ, while Honda filed a lawsuit against the Hebei Shuanghuan Auto Co claiming its RAVO S-RV was a direct copy of the CR-V.

The RAVO sells for almost a third of the price of a CR-V in China.

This year, China will build more than 2.3 million passenger cars and several Chinese car-makers, including Chery, have flagged plans to export.

Mr Sturrock said he believed it would be several years before any FTA with China would be ratified.

"There’s still a long way to go in the negotiating process," he said.

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