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China took an interest in all trade and economic activities with its foreign partners and the issue between automakers Shanghai Automotive Industry Corp. (SAIC) and MG Rover Group should be resolved through negotiations, a Chinese official said Tuesday.
"I have noticed the reports (about SAIC and Rover),” Ministry of Foreign Affairs spokesman Qin Gang told reporters during a regular press briefing when asked about the issue.
The talks between the two firms were a commercial matter and negotiations would bring the matter to a “proper” resolution, he said.
The comments come as negotiations between SAIC and MG Rover seem all but dead, with the U.K. carmaker going into receivership in recent days.
On Tuesday, Xinhua quoted Zhu Xiangjun, vice director at the SAIC president’s office, as saying the original plan for a joint venture with Rover to build a factory fell through because of the U.K. company’s financial problems. Buying MG Rover assets now would still be a huge risk, said Zhu.
The planned investment in the joint venture was estimated at between 200 million pounds (US$376.84 million) and 300 million pounds, Zhu said, adding that SAIC had already paid MG Rover 60 million pounds for some technology and branding rights.
Last week, British Prime Minister Tony Blair talked by telephone with Chinese Premier Wen Jiabao briefly about the issue.
SAIC has an auto parts making unit listed in China called Shanghai Automotive Co.
The four directors of Phoenix Venture Holdings (PVH), which owned struggling MG Rover, appointed trustees for a fund, which would administer their 40 percent holding in PVH on Tuesday.
In a statement, PVH said its assets could be worth between 10 million pounds and 30 million pounds, and that this could be used “to help the families and dependents of (MG Rover’s) Longbridge workforce.”
(Shenzhen Daily April 14, 2005)
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