GM Bets Next 20 Years on China, Three Years After NLPC Warned Shareholders
In May, General Motors sold more than 10,000 units of a new Buick in its first month on the market — a rare bright spot for an American automaker in China.
The nameplate is all-American. Almost nothing else about the car is. The Buick Electra E7 was designed, engineered, and built by GM’s joint venture with SAIC, the Chinese state-owned company that has been GM’s partner in China since 1997.
On August 5, GM tied itself to that partner for another two decades. The two companies renewed their joint venture through 2047, a year before the old deal was set to expire. GM will now use China as an export hub, shipping cars built there to the Middle East, Africa, South America, Mexico, and Asia. It will pull the Chevrolet brand from Chinese showrooms and concentrate on Buick and Cadillac.
NLPC has seen this movie before — and told GM shareholders how it might end.
What NLPC put in front of shareholders in 2023
Three years ago, NLPC brought a proposal to GM’s annual meeting asking a straightforward question: how much does this company depend on China, and how exposed is it if that relationship sours? The resolution asked GM to report each year on “the nature and extent to which corporate operations depend on, and are vulnerable to, Communist China.”
The heart of the argument was not that GM should leave China. It was that GM’s disclosures about China were, in NLPC’s words, “fragmented, incomplete, and vague” — scattered across filings and too general to let an investor size up the risk. Shareholders were being left, the proposal said, “in the dark as to the extent and nature of this risk.”
GM’s board urged shareholders to vote it down. They did.
The dependency didn’t shrink — it moved up the value chain
What has happened since is worse than the 2023 proposal described, not because China lost GM money — the venture is profitable again after a restructuring that resulted in more than $5 billion in non-cash charges — but because of what GM now relies on China to do.
For years, foreign automakers used China as a cheap place to build cars designed back home. That has flipped. As Reuters reported in July, GM, Volkswagen, and Renault are now handing car development itself to Chinese engineers. The Buick that sold so well runs on a platform called Xiao Yao, developed by GM’s venture in Shanghai, with features “absent” from GM’s Detroit-designed vehicles. GM plans to put that Chinese-developed platform into the next Cadillac Optiq, replacing the American-engineered one it uses now.
A former GM engineer put it plainly to Reuters: with this new Buick, “the product definition and technical roadmap are for the first time firmly in the hands of the China team.”
That is a deeper kind of reliance than buying parts or chasing sales. It is the engineering itself — the platforms, the software, the design direction — migrating to a venture half-owned by the Chinese state. NLPC flagged the technology-entanglement risk in 2023, citing the venture’s move into developing its own chips. The 2026 version is larger.
A 20-year deal that only one side is truly bound to
Here is what the word “commitment” obscures. A two-decade contract sounds mutual and durable. In substance, the two parties are not bound in the same way at all.
GM is a publicly traded, SEC-regulated company. It answers to shareholders, discloses under American law, and can be sued for breaking its word. If GM wants to walk away from this deal, it faces real legal and financial consequences, and everyone knows it.
SAIC is owned by the Chinese state. Any dispute over the venture would be settled inside a legal system the same government controls. If Beijing decides the arrangement no longer serves the company or the country, the practical ability of GM to hold its partner to a 20-year term is close to theoretical.
NLPC made this point in 2023 with examples — Anbang, HNA, CEFC — companies the Chinese state seized or forced to restructure, and quoted a member of Congress that “there is no such thing as a private company in China.”
So GM has locked in plants, tooling, a 3,000-person technical center, and two decades of exposure. Its state-owned partner has locked in the right to absorb the technology and market position it is now leading — and to revisit the whole arrangement whenever its owner sees fit. One side can be held to the deal. The other can leave when it chooses.
Why this belongs in a disclosure investors can actually read
None of this reached GM’s owners through the kind of dedicated, plain-language China-risk report NLPC asked for in 2023. It reached them through wire-service reporting and anonymous sources — the Cadillac platform switch was, in Reuters’ words, “reported here for the first time.”
Whether shareholders can evaluate a 20-year, technology-transferring bet on a state-owned partner depends on how candidly the company describes it.
That is a board-level responsibility — and GM’s board is led by the same person who runs the company. Mary Barra (pictured above) is both GM’s chief executive, who made this bet on China, and the chair of its board, which is supposed to hold management accountable for telling shareholders the truth about it. When one person fills both roles, the people making the deal and the people vouching for how honestly it’s disclosed are the same.
NLPC’s 2023 warning is available to investors still. Three years on, its central complaint — that GM tells its owners too little about what China means to this company — has only grown harder to dismiss.