International automotive industry leaders General Motors and Toyota announced this week that they would be expanding their Chinese operations to include electric vehicle development. GM announced a cooperation agreement with its flagship Chinese partner, SAIC, to co-develop electric vehicle technology in China. GM's announcement follows in the wake of a contentious series of strained negotiations between the American car maker and the Chinese government.

The Chinese government imposed restrictions on foreign automakers which would require GM to share aspects of its proprietary EV technology with a Chinese car maker if it wanted to ensure that the Chevrolet Volt would qualify for Chinese state subsidies. The signing of the new cooperation agreement has been seen by some as an attempt by GM to appease the Chinese government's demands without divulging trade secrets.

The appeal of the Chinese new energy vehicle market was further displayed by recent rumors of an upcoming EV being co-developed by Toyota and Chinese automaker FAW.

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Report in AP Business
Further analysis in Forbes
Early reports and leaked photos at China Car Times

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