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Chinese auto industry looking to strengthen ties with Detroit automakers, parts suppliers

China’s automotive industry needs to increase its spending on research and development and strengthen its joint venture ties with U.S. automotive manufacturers, a top Chinese automotive official said today in Troy.

“For the China automotive industry to go into international markets we need to be learning from General Motors, Ford and Chrysler and increase our a cooperation …then we can succeed,” said Yang Dong, executive vice president and secretary of the China Association Automobile Manufacturers.

“We should change from only focusing on Chinese market, to both domestic Chinese market and international market.”

Dong is in Troy today as part of the 2014 China Forum, which is sponsored by the Detroit Chinese Business Association. The event is designed to bring Chinese automotive parts manufactures in contact with Michigan developers looking to convince the country’s manufacturers to locate their North American operations in Michigan.

Dong said Chinese automotive manufacturers and parts suppliers need to increase the percentage of money they spend on research and development.

To achieve that, Dong said, Chinese companies should strengthen and increase their joint ventures with U.S. automakers and parts suppliers.

Already, Chinese automotive parts suppliers export 15.5 billion – or about half of the country’s total parts exports – annually in automotive parts to the United States.

However, a large portion of those parts are low-cost, low-tech automotive parts.

Dong said Chinese auto parts manufactures would like to change that.

“I think China really has the potential to have the ability to manufacturer high quality, core components in China,” he said.

Steven Hilfinger, chief operating officer of the Michigan Economic Development Corp., said China is the third largest global market for goods exported from the state, behind Canada and Mexico.

Last year, Michigan manufacturers exported $4 billion in goods to China.

“Governor (Rick) Snyder is very committed to building a relationship between Michigan and China and Chinese companies,” Hilfinger said. “Our ties with China are strong and we hope to make them stronger.”

Michael Liu, chairman of a Chinese real estate developer Third Wave Group, said Chinese automotive parts manufacturers should consider locating in Michigan.

Liu said he is working to develop a manufacturing park in Plymouth Township.

Liu told those gathered that Chinese automotive manufactures are likely to invest billions in the coming years as the industry expands globally and asked Michigan legal, accounting and other professional firms to help him recruit Chinese investment to Michigan.

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