SinoCast reports that General Motors is involved in negotiations to build a joint venture automobile financing company with a local financial company in Shanghai.

Observers say that the move is significant because the lack of consumer credit infrastructure in China could hold back the development of the car market.

In the SinoCast report, Li Shuke, financial consumption service director of General Motors (China) Co., Ltd. said that the two JV parties had reached an agreement and the application document of the joint venture to the People’s Bank of China was prepared.

In the report, Li also said that according to the security clauses signed by both sides, GM’s partner could not be named.

Li told SinoCast: “We take efforts to introduce foreign automobile credit system to China, and it will be used the joint venture company. At present, the company is carrying on the personnel preparation and conducting training to the partner.”

The report added that ‘preparing construction of the company would finish by the first half year of 2003’.