Before anyone makes a big deal out of the agreements made between Germany and China, announced yesterday, look closer at what they were. One is bringing SEAT the small Spanish car maker in a joint venture between BMW and Anhui Jianghuai Automobile Group Corp, Ltd. (confusing, so read JAC). They called this “expanding the joint venture” which sounds better. The German companies BASF and Siemens also announced similar agreements, typical of those noted to make a point, but not produce much. Germany’s Chancellor said his was to demonstrate the need for “free trade” presumably because the US is going its own way and trying to disrupt the cozy arrangements some of these companies have with China. None of this speaks to free trade in any aspect. Just the opposite.
Joint ventures are the way most Chinese companies steal technology now. Years ago, the US-China Economic and Security Review Commission did a long review of the Chinese aircraft industry and documented how these JVs were used to steal the technology. It is probably working that way for the Germans too.
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