Beijing adds tiny speed bump for cars going global

Li Auto

02/09/2026 13:00

The author is a Reuters Breakingviews columnist. The opinions expressed are her own.
By Katrina Hamlin
HONG KONG, Sept 2 (Reuters Breakingviews) - It will take much more for officials in Beijing to slow Chinese cars going global. Regulators have set new guidelines warning automakers to refrain from disruptive competition abroad. But the $113 billion BYD 002594.SZ, 1211.HK and rivals are likely to conclude they can't afford to tap the brakes.
The Ministry of Commerce on Tuesday laid out recommendations to "promote healthy and orderly development" of the industry's expanding overseas footprint. Those range from establishing better quality controls to avoiding frequent price changes that could harm consumer interests or damage brand image. It's a rare official acknowledgement that some ground rules may be needed. Three ministries throwing their weight behind it adds clout.
Yet penalties for non-compliance are conspicuously absent. And given regulators have not entirely reined in destructive price wars at home, it's unlikely they will do so in overseas markets, which are helping to soak up China's excess capacity. One reason may be cracking down too hard on manufacturers will put too many production lines and jobs at risk. 
At the same time, domestic car sales are falling. First-half deliveries fell by 2.3 million compared to the same period last year – equivalent to losing a Japan-sized market, Reuters calculated. Little wonder auto executives are accelerating their push abroad: monthly sales data show BYD and Geely Auto 0175.HK more than doubled their August exports year-on-year. Even marques such as Xiaomi 1810.HK and Li Auto 2015.HK, which previously prioritised the Chinese market, are now working on expansion plans. Total exports could reach 10 million for the full year, according to forecasts from Alix Partners, which would be roughly 20% more than 2025.
Exports are also more lucrative, as brands take advantage of higher prices in wealthier markets like Europe. Core net profit per BYD car shipped and sold abroad reached 20,000 yuan ($2,975), analysts at Citi estimate, nearly 10 times higher than for models sold at home. The company is also opening up new factories around the world, which should further boost its global presence.
As foreign markets become vital to offset slumping domestic revenue, automakers will be highly motivated to deploy the same brutal strategies they deployed at home to win market share. If regulators are serious about preventing this, they will need a bigger speed bump.
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CONTEXT NEWS
Chinese regulators on September 1 issued new guidelines for automakers' overseas operations, ​calling on companies to comply with laws governing outbound investment and overseas business activities, while strengthening anti-monopoly, anti-corruption and social responsibility compliance.
The notice was issued by the Ministry of Commerce, the Ministry of Industry and Information Technology, and the State Administration for Market Regulation.

(Editing by Robyn Mak; Production by Ujjaini Dutta)
((For previous columns by the author, Reuters customers can click on HAMLIN/katrina.hamlin@thomsonreuters.com; Reuters Messaging: katrina.hamlin.thomsonreuters.com@reuters.net))