For General Motors (GM) China, 2004 brought a wide variety of new challenges that added to an already complex business environment. Industry structure was changing quickly, demand and supply projections for motor vehicles had promised substantial increases in sales and profits but suddenly optimism faded. China's membership in the World Trade Organization created expectations of a level playing field for foreign investors, but major barriers remained, including continuing government intervention, competition from government-owned assembly firms, arbitrary rules such as sector-specific credit restrictions and violation of intellectual property with the copying of foreign automobile designs and false-branding of parts. Meanwhile, inflation was increasing and the government was unsure whether and how to use monetary and fiscal policies. This is an abridged version of GM in China, product 9B05M007.
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