A foreign petrol brand opened its first petrol station in south China’s Guangzhou city recently, according to local media reports. Its opening prices were 1.6 yuan per liter lower than that of Chinese brands, and it provided other inducements. Despite these being first-day promotions,
The Beijing News editorializes that it will nonetheless bring much-needed competition to the domestic market.
Previously, China required foreign petrol companies who operate more than 30 petrol stations in the country to enter a joint venture with a local company and give that company a controlling stake in the enterprise. China removed that restriction on July 28. As a result, America’s ExxonMobil and Germany’s BASF launched a US$10bn project with Guangdong Province. Such deals help stabilize China’s macroeconomic and financial conditions, while also reflecting that China is improving its business environment, the paper editorialized.
In the long run, the presence of foreign-owned petrol stations could bring fiercer competition, forcing domestic companies to improve their service and likely driving down prices, the editorial predicts.
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