The branding for Baidu’s Apollo self-driving car system is displayed on a car at the Baidu World Technology Conference in Beijing, China. Photo by Bloomberg

China is the world’s biggest market for new cars, making it a hugely valuable place for global car makers to do business. But when it comes to autonomous vehicles, China is likely to impose severe restrictions on foreign companies, hurting firms like Alphabet’s Waymo in particular.

Chinese policy makers want to leapfrog the West and create their own cutting-edge driverless and electric cars. Government-backed investment funds are pouring money into self-driving car startups, while erecting barriers to protect the market. They hope to replicate the success of firms such as smartphone and telecommunications equipment maker Huawei that has caught up with and in some ways surpassed foreign competitors.

THE TAKEAWAY 
• China is likely to limit foreigners’ role in self-driving cars
• Firms doing pieces of the technology will be allowed to do business
• Chinese winners could include startups and tech giants like Baidu

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Bill Russo quote:

For automakers, “China is the growth engine for new sales as well as profits,” said Bill Russo, founder of Shanghai-based investment advisory firm Automobility.