Tesla hits a bump at Shanghai auto show

Top FDI recipient

As the world's second-largest economy, China is an attractive market for carmakers and other companies.

The country overtook the US last year to become the biggest recipient of foreign direct investment, and this momentum is continuing.

China's use of foreign capital rose by 43.8 percent year-on-year to $44.86 billion in the first quarter of this year, according to the Ministry of Commerce.

Denis Depoux, global managing director at consultancy Roland Berger, said at the Boao Forum for Asia this month that foreign companies are viewing the business environment in China quite favorably.

At the forum, Sean Shan, Takeda China president, said the global biopharmaceutical company is impressed by the local operating environment.

"Progress has been made, particularly in our industry, to advance regulatory reform in China, which supports innovative companies, both local and foreign," Shan said.

In an interview last month, Jochen Goller, BMW Group Region China president and CEO, said the carmaker is increasing investment in China, which is its largest market and home to its biggest research and development network outside Germany.

BMW's iX3 electric SUV is being manufactured in China for the global market. Since 2009, BMW has invested more than 64 billion yuan ($9.81 billion) to build vehicle and battery plants in Shenyang, Liaoning province.

Goller said, "These latest moves by BMW in China are based on our confidence that we will strive to seize the greater opportunities brought by a more open China."

Last month, Musk attended the China Development Forum online. He told reporters China would become Tesla's biggest market and be where the company manufactured most of its vehicles.

Experts commenting on Tesla's perceived arrogance in dealing with customer complaints said what matters most in this case is building a law-based, open and fair market system for all enterprises and customers－regardless of whether they are domestic or foreign. This would enable inferior products, monopolistic and other behavior that harms customer interest to be detected and punished.

Zhang Yansheng, chief researcher at the China Center for International Economic Exchanges, said: "China has been stepping up efforts to build a more open and fairer business environment that applies high-level international standards for all market entities. Infringement of market regulations must be made accountable, but only within the framework of laws and international rules."

Tu Xinquan, professor and dean of the China Institute for WTO Studies at the University of International Business and Economics in Beijing, said improper behavior can occur at any enterprise. It is important to improve government regulations and market governance to detect and discipline those who breach rules. Whether such violators are domestic-or foreign-funded should make no difference.

The Central Commission for Discipline Inspection said international companies are welcome in China but they must obey the country's laws and respect Chinese customers.

Liu Zhihua contributed to this story.