GlobalAutoTV
Click to watch David S. Eberly -
Click to watch David S. Eberly -
china resources


Need an office in China? Office suites, meeting rooms, virtual offices, network access



free downloads
CHINA: "China Tax Monthly" Alert

CHINA: "China Tax Monthly" Alert. 4-page Alert by Baker & McKenzie.

proceed to download
eJournals



back to index backCHINAtalk May,  2017


China to allow majority foreign ownership for car ventures

Rule change could mean more green tech for carmakers and less trade friction.

China will allow foreign majority ownership of automotive joint ventures by 2025, the government said April 25, a move that prompted cheers abroad but apprehension at home.

A government plan for the domestic auto industry states that restrictions on investment in joint ventures will be relaxed "in an orderly manner." Authorities have not given a detailed time frame for the deregulation, or explained its scope.

China is the world's biggest auto market, with some 28 million vehicles sold last year. Foreign automakers hold a roughly 60% market share. But the investment limits have frustrated some Japanese manufacturers. They complain that their inability to exert management control hinders capital investment and makes research and development less effective.

For Japanese carmakers, Chinese ventures in which they hold majority stakes will be fully reflected in the earnings of parent companies. One manufacturer welcomed the change, saying the degree of managerial freedom will rise.

Chinese partners at these joint ventures are more circumspect, with many claiming that the development of homegrown brands will face obstacles under the new rules. Some want the current regulations extended.

China is easing controls on foreign ownership against the twin backdrops of the green vehicle revolution and trade friction with the U.S.

The deregulatory move is meant to send a message to the U.S. that China is further opening its car market. U.S. President Donald Trump has made helping domestic carmakers a priority by pressing trading partners to ease restrictions.

The meeting in early April between Chinese President Xi Jinping and Trump produced a 100-day plan geared toward reducing trade imbalances between the two countries. By signaling a conciliatory stance regarding cars, Beijing hopes the U.S. will back off from demands to open up its energy sector and others it deems strategically important.

China is also hoping to gain access to new technology by relaxing the rules on auto investment. Automakers have stepped up production of electric vehicles and plug-in hybrids, and the development plan calls for sales of 7 million "new-energy vehicles" in 2025, nearly double the target of the previous blueprint. The plan also envisions fully autonomous vehicles hitting the streets that same year.

China is hoping the joint ventures will give it access to advanced green car technology. Japan's Toyota Motor owns 50% stakes -- the maximum allowed -- in separate joint ventures with FAW Group and Guangzhou Automobile Group. Similarly, Nissan Motor operates a 50-50 venture with Dongfeng Motor Group.

Source: Nikkei Asian Review - GAI



previous page

go top
search our site


Loading

CHINAtalk

Other articles from the same issue (May,  2017).

Automakers answer govt call to expand
play read on

China to allow majority foreign ownership for car ventures
play read on

China's annual output of automobiles expected to break 50m
play read on

China bares plan to be top global automaker by 2027
play read on

Chinese Car-Sharing is Blossoming
play read on

China’s auto industry should independently develop technologies
play read on

Consumer Insights on New Energy Vehicles in China
play read on

Tax incentives and future development trends of the New Energy Vehicle industry
play read on

A Robot Revolution, This Time in China
play read on

CFOs are turning positive and prioritize business expansion in 2017
play read on

Quality of Leadership Matters Most to Senior Talent in China, Finds Latest Employer Branding Survey
play read on

Making Sense of China’s 2017 Economic Growth Target
play read on

What to expect from Made in China 2025 and China's first Belt and Road Forum
play read on

Prospects for future economic cooperation between China and Belt & Road countries
play read on

China's rising leverage is a growing risk
play read on

It’s Time for the U.S. to Revoke China’s Free Pass on Trade
play read on

China Contract Templates: the Cons and the Cons
play read on

More Than 25 Employees: Do I Need To Establish A Trade Union?
play read on

One Belt One Road in 2017: Continuing the Momentum
play read on

China Cyber News Alert
play read on

Work Permit Changes to Attract Foreign Talent
play read on

“Two Invoice System”
play read on

Draft Amendment to the Anti-Unfair Competition Law Pending Final Review
play read on

China: IFRS 16 – Lease definition
play read on

Where Manufacturing Activity Stands in China
play read on

Belt and Road online database released in Shanghai
play read on

A New Dawn for the International Tax System: Evolution from past to future and what role will China play?
play read on

How fintech disrupts supply chain finance in China
play read on

China-ASEAN trade to hit $1t by 2020
play read on

China's emergence as a key patent litigation hub poses challenges for its companies
play read on


Our Free eJournals
GlobalAutoExperts

To visit GlobalAutoExperts Directory, click here.


©2008 GlobalAutoIndustry.com | HCI Group, Ltd.
101 West Big Beaver Road, Suite 1400 | Troy, MI 48084 USA
USA Tel: +1.248.687.1060 | USA Fax: +1.248.927.0347
Fax UK: +44.(0)845.127.4765 | Fax Europe: +31.20.524.1659 | Fax Asia: +852.3015.8120