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China Hints Friction With U.S. Could Jeopardize Auto Deal

September 20, 1992

BEIJING (AP) _ China is hinting that a $130 million deal with the Big Three automakers could be jeopardized if the two countries fail to resolve trade and other disputes, an official newspaper reported Sunday.

The English-language China Daily said Chinese trade officials were ″uncertain″ about the future of the deal to import American cars from General Motors Corp., Chrysler Corp. and Ford Motor Co. due to ″recent tensions in U.S.-China relations.″

The U.S. companies agreed in July to export vehicles to China, which is eager for American technology to make auto parts and specialized vehicles. China already has a joint-venture agreement with GM in the northeastern city of Shenyang and another with Chrysler in Beijing.

The automakers said Sunday they were unaware of any potential problems with the export deal and were proceeding as planned.

Ford spokeswoman Lin Cummins said China had ordered 3,010 Ford Tempos and the first cars were to begin rolling off the assembly line in Kansas City this week. The first shipments are scheduled for December.

GM spokesman Ronald Theis said his company was proceeding with the deal on schedule. ″I know of nothing that has changed that,″ he said. A Chrysler spokeswoman did not immediately return a telephone call seeking comment.

Relations between China and the United States have soured because of Washington’s decision to sell fighter jets to China’s rival government in Taiwan and squabbling over U.S. demands for greater access to the Chinese market.

Last month, the United States threatened to slap punitive tariffs of up to $3.9 billion on Chinese products if the two sides failed to resolve their differences over market access by Oct. 10.

China countered by saying it would consider retaliatory tariffs of up to $4 billion on U.S. goods ranging from computers to cars.

China also has threatened to halt imports of U.S. wheat if Washington goes through with sale of 150 F-16 fighters to the Taipei government, which, like Beijing, claims sovereignty over all China.

Last year, China’s exports to the United States totaled $19 billion, while its imports of U.S. goods came to $6.2 billion. High-level negotiations on the trade dispute are to resume in Washington on Oct. 6.

Update hourly