German automakers are trying to shift production to China, where they have been in decline for years due to a series of pollution issues, as China gears up to open its first state-owned car assembly plant.
German automakers are pushing ahead with their plans to invest $1 trillion in the country, which is expected to produce 1.5 million cars a year by 2022.
The country is also investing in new auto plants and other infrastructure.
China has more than tripled its automotive production in the past decade.
The German automakers, which have been working on their own solutions, have been looking for Chinese partners.
The German government has asked Chinese firms to set up a factory for the next generation of electric vehicles.
“The situation is becoming more and more complex,” said one industry source.
“There is a lot of pressure on the Chinese manufacturers and they are also starting to do things with a new set of criteria, which will have to be adjusted by the German government.
Germany is not averse to the new rules but it is not going to be easy.”
Chinese auto makers are investing billions of dollars in China.
They have also been lobbying for access to the Chinese market, especially in the manufacturing sector.