State Administration for Market Regulation Photo: VCG

The State Administration for Market Regulation (SAMR), China's top market regulatory agency, has conditionally approved the acquisition of UK auto supplier Dowlais Group by American Axle & Manufacturing, according to an announcement released on the SAMR's official website on Friday.

As the case involves an acquisition deal between major global suppliers of automotive drivetrain products, approval was required in various regions, with EU approval being granted in October last year.

During the review process, the SAMR fully considered the potential impact of the transaction on competition in the Chinese domestic market for automotive power transmission units and rear-wheel drive modules. American Axle and Dowlais have committed to four undertakings: providing fair, reasonable, and non-discriminatory supply and development opportunities; continuing to perform existing contracts; maintaining stable prices; and not unreasonably refusing renewal requests. 

These commitments are conducive to ensuring reasonable pricing and stable supply of relevant high-performance automotive components, safeguarding the interests of downstream customers and consumers, and creating a fair competition environment for the healthy and orderly development of China's automotive industry, the SAMR noted.

"In this acquisition case, the SAMR conducted a professional review and granted conditional approval to the transaction with targeted restrictive conditions. This approach not only safeguards fair competition in China's automotive industry but also protects the legitimate interests of foreign enterprises operating in China," Wang Peng, an associate research fellow at the Beijing Academy of Social Sciences, told the Global Times on Friday.

Wang noted that China has consistently conducted reviews of joint ventures, mergers, acquisitions and other market activities in accordance with laws and regulations.

The SAMR had granted conditional approval to a Chilean joint venture set to manage the Salar de Atacama lithium mining project in Chile, aiming to ensure the stable, non-discriminatory supply of imported lithium carbonate, the Xinhua News Agency reported on November 10.

The National Copper Corporation of Chile (Codelco) and Chilean chemical company Sociedad Quimica y Minera de Chile S.A. (SQM) plan to form the joint venture by injecting assets to manage the Salar de Atacama lithium mining project, according to the report. 

With restrictive conditions attached to the approval, Codelco, SQM and their joint venture have committed to continuing to fulfill existing contracts, to providing a fair, reasonable and non-discriminatory supply, and to issuing timely reports on major supply changes.

Wang Qiuping, a spokesperson for the SAMR, said in December that these measures ensure the security and stability of China's industrial and supply chains, achieving a balanced enforcement approach that both mitigates monopoly risks and promotes industrial development. This decision will have a positive impact on building a healthy and orderly ecosystem for the new energy industry.

China's rational and pragmatic approach to law enforcement stands in stark contrast to the practices of certain countries that politicize and weaponize trade and economic issues, demonstrating China's commitment to high-level opening-up, Wang Peng said.