Mainland To Open Up Car Manufacturing By 2022

The mainland announced on Tuesday a timeline to open up its manufacturing sector including scrapping ownership limits for foreign automakers, shipbuilders and aircraft firms – addressing a contentious issue in its trade dispute with the United States.

The liberalisation meets a longtime demand of the US and other countries seeking better access for their companies in the world's biggest car market and one of the largest markets for air travel.

China currently restricts foreign auto firms to a maximum 50 percent ownership of joint ventures with local companies.

The country will this year end shareholding limits for new energy vehicle firms such as those that produce electric cars, according to the National Development and Reform Commission (NDRC).

The move will be followed by commercial vehicles in 2020 and passenger cars in 2022, when it will also abolish restrictions limiting foreign automakers to two joint-venture partners, the NDRC said in a statement.

"After a five-year transition period, the auto sector will lift all restrictions," it said.

Auto analysts said the new rules will have the most immediate benefit for electric car makers, especially those with a less established presence on the mainland.

One car company likely to gain is electric car giant Tesla led by entrepreneur Elon Musk, who this year had asked US President Donald Trump for help on the market access issue, alluding to the troubles his firm has faced producing on the mainland.

Under the current setup, foreign carmakers must transfer proprietary technology to the joint venture companies they set up – the issue of forced technology transfer has been a top concern for the Trump administration.

"China's full opening of the manufacturing industry is a clear indication of our opposition to trade and investment protectionism, and shows our clear support to widening and deepening the development of economic globalisation," the NDRC said in the announcement. (AFP)