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There is only one year window for the adjustment of foreign equity ratio. Following the abolition of restrictions on foreign ownership in special vehicles and new energy vehicles in 2018 and the abolition of restrictions on foreign ownership in commercial vehicles in 2020, foreign investment in automobiles will be fully open in 2022.
On January 26, the State Council Information Office held a press conference. Huang Libin, the spokesperson of the Ministry of Industry and Information Technology and the director of the Operation Monitoring and Coordination Bureau, said in response to reporters that “in 2022, restrictions on the foreign shareholding ratio of passenger cars and joint ventures will be lifted. If the limit of two companies is exceeded, foreign investment in automobiles will be fully opened by then."
Huang Libin introduced that in the development of the automobile industry, we have always adhered to the principle of open development. It can be said that China is one of the most open automobile markets in the world. Almost all well-known international automobile group companies have joint ventures in China and have obtained A good return and development. In the next step, the Ministry of Industry and Information Technology will adhere to the concept of global development and actively carry out exchanges and cooperation in the fields of R&D and design, trade and investment, standards and regulations with relevant countries, jointly maintain the stability and smoothness of the automotive supply chain, and guide industry enterprises to take the initiative to respond, practice hard work, and develop advanced Applicable models will enhance technological innovation capabilities, and innovation capabilities will also have a new development pattern.
"On the one hand, with the acceleration of the global automotive industry’s electrification transformation process, internationally renowned automotive companies continue to increase investment and cooperation in China, effectively promoting the improvement and upgrading of China’s supporting industrial chain, promoting technological progress, and driving employment and Economic growth. Chinese enterprises are also in the competition with international masters to "pass", improve their technical level, temper their competitive skills, and hand over a beautiful answer to the market. On the other hand, after the full liberalization of foreign investment restrictions, Market competition will inevitably become more fierce, and companies with insufficient innovation and poor adaptability will face the risk of being'out of the game', and the process of mergers and reorganizations and survival of the fittest may accelerate." Huang Libin said.
Recently, good news about the liberalization of foreign investment in automobiles has continued. The China-EU Comprehensive Investment Agreement (CAI) signed on December 30, 2020 shows that the automobile industry, as the crown jewel of the manufacturing industry, is listed in parallel with the manufacturing industry and financial services. China will cancel and eliminate the enterprises in EU countries. Chinese joint ventures restrict regulations and are committed to market access for new energy vehicles. In terms of market access, the opening up to European companies has reached an unprecedented level. Examples of disclosed provisions show that China will open up investments in new energy vehicles, cloud computing services, finance, and telecommunications industries to European companies. At the same time, the agreement allows European automakers to invest in new electric vehicle companies under the premise of operating at full capacity with existing investments.
Many foreign-funded enterprises are constantly increasing the share of joint ventures.
Seeking cooperation in the fields of electrification and intelligent networking has become the main direction for foreign-funded enterprises and Chinese enterprises to jointly develop.
In fact, foreign shares in the auto industry were proposed by the National Development and Reform Commission earlier than the liberalization in April 2018. At that time, the "Foreign Investment Negative List" clearly stated: "The automobile industry will be opened for a transitional period by type. In 2018, restrictions on foreign ownership of special vehicles and new energy vehicles will be lifted; restrictions on foreign investment in commercial vehicles will be lifted in 2020; The restrictions on the ratio of foreign shares in the use of vehicles will be eliminated, and the restriction on no more than two joint ventures will be removed. Through the five-year transition period, the automotive industry will all remove restrictions."
According to the plan proposed in 2018, China will complete the final step of liberalizing the auto industry's share ratio in 2022. By then, domestic auto companies and auto parts companies will fully compete with foreign companies. Under the severe competition, some Chinese auto companies may face the cruel situation of elimination. But from the perspective of the entire Chinese auto market, a more open market environment will accelerate China's transformation from a major auto power to a powerful auto power.
Play your article information source-China Industry News Network
