Trouble seems to be brewing in one of the world’s largest automotive markets, China. It has been reported in the Wall Street Journal that the Chinese Government wants to force foreign companies to reveal their electric vehicle technology before they can sell their wares in China.

The country’s current proposition says that foreign automakers wishing to produce electric technology must form a joint-venture with a Chinese company. In the joint-venture, the foreign company would only hold a 49 percent stake, which basically means the Chinese company will hold a majority stake.

This is all part of the government’s 10-year plan, at making the nation “the world’s leader” in developing and producing battery-powered cars and hybrids, according to executives of four foreign auto makers. The Wall Street Journal says that the plan is to develop three to five Chinese companies into global EV and hybrid players by 2020, along with two to three global suppliers of key components such as batteries and motors.

This will be a dangerous balancing act for foreign companies as China has a lot of leverage, being one of the biggest auto buyers in the world, while revealing their tech secrets could see it being used for other purposes. The plan will be distributed among other government agencies and state-owned automakers to gauge their opinions on the matter. There is a likelihood that the technology transfer clause could be changed or even modified before the plan is commissioned. If there is no opposition to the plan, it could be put in place as soon as next month.

A very scary thought, but if Toyota’s actions are a precursor to other automakers actions, we could see a major pullout of foreign companies from China. Toyota have postponed the release of its latest generation Prius hybrid in China (which has been on sale in many other market since 2009) until they get confirmation on China’s plan.