Greg Gardner

Detroit Free Press

Shares of General Motors fell Wednesday after a Chinese government-run newspaper reported that the government will penalize a U.S. automaker soon for alleged anti-competitive behavior.

The China Daily didn't identify the company but quoted the government's top price regulator as saying the automaker would be fined for "impeding competition." GM stock fell $1.41, or 3.77%, to close at $35.95 a share.

The story appeared on the day a Chinese government spokesman said any change in U.S. policy toward Taiwan will damage stability in the region. Over the weekend, President-elect Donald Trump said he didn't feel bound to recognize Beijing as China's sole government.

The China Daily quoted Zhang Handong, director of the National Development and Reform Commission's (NDRC) price supervision bureau, as saying investigators had found that a U.S. auto company had instructed distributors to fix prices starting in 2014.

China has fined other foreign automakers six times since 2011 when it began a series of investigations of pricing practices.

Volkswagen’s Audi was fined $40.5 million and Fiat Chrysler received a smaller penalty on charges they suppressed competition. An official cited by government media said Mercedes also violated the law but no penalty was announced.

Linda Lim, a China expert and professor of business strategy at the University of Michigan's Ross School of Business, said several factors may be at play.

"If you didn’t have the Trump phone call to Taiwan this might have happened anyway," Lim said. "Car prices in China have been falling for a while now because of the weaker economy."

Over the last several years, the government reduced a tax on purchases of cars and light trucks as part of a broader policy aimed at encouraging consumers to spend more and save less. That lower rate is scheduled to expire at the end of this year, but there has been speculation that it may be extended.

GM sells more cars in China than any other U.S. automaker, and its Buick brand sells about four times as many vehicles in China as it sells in the U.S.

China, the world's largest auto market, is crucial to GM, accounting for more than one-third of the 9.96 million vehicles GM sold globally in 2015. Profits from its Chinese joint ventures equaled 20% of GM's 2015 earnings of $9.7 billion.

Ford's China joint ventures represented about 16% of its global pretax profit of $9.4 billion in 2015.

“GM fully respects local laws and regulations wherever we operate," the company said in a statement. "We do not comment on media speculation.”