Chinese HUMMER Approval Process Gets Confusing

The details are sketchy at best, but we’re trying to keep you as up to date as possible. Yesterday Reuters reported that China’s Ministry of Commerce had returned Tengzhong’s application to purchase HUMMER from GM. Later yesterday, we learned that the application just needed clarification and the approval process was continuing. Today, Bloomberg is reporting that it was indeed about the details, but that it hasn’t even been seen or reviewed by the Ministry of Commerce. Confused yet? We’ll try to help.

Supposedly, the HUMMER deal was sent back for clarification by National Development and Reform Commission (NDRC) since the application did not detail whether or not the deal included purchasing HUMMER’s patents – according to an unnamed government official.

Then, the Vice Minister of Commerce said that “I, based on the current situation, understand that” Tengzhong’s application has been sent back. “It’s not in coordination with our nation’s industrial policy.” Then he added that the Ministry of Commerce hadn’t even reviewed the application, but that a “relevant department is currently reviewing and has expressed opposition,” which presumably is the NDRC.

So – did the NDRC really send the application back for more details or because it didn’t jive with their “nation’s industrial policy?”

One important fact to remember is that the Tengzhong doesn’t actually need the approval of the NDRC to complete a purchase, but would need their approval if they had intentions of ever opening a production facility in China. According to HUMMER’s CEO, the plan is to keep HUMMER production in the U.S. on a long-term basis.