Page 184 - 2019 White Paper on the Business Environment in China
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9 White Paper on the Business Environment in China
level five cover complete automation in any condition. would scrap rules that require global automakers to work
The bold prediction was backed by Chinese consumers’ through local state-owned partners, an arrangement
optimistic attitudes towards the disruptive technologies. that forces them to share technology with potential
In China, more than 60 percent of survey respondents competitors. President Xi Jinping announced that Beijing
believe their families will be riding in autonomous cars in would ease ownership restrictions and cut auto import
the future (Jing). duties. Limits on foreign ownership of electric vehicle
producers will be eliminated this year, the Cabinet’s
According to the Ministry of Public Security, China had planning agency said. A similar repeal for makers of
319 million motor vehicles as of the end of June 2018. commercial vehicles in 2020 and passenger vehicles will
In the first half of 2018, the number of newly registered follow that in 2022 (Associated Press, China to Allow).
vehicles reached 16.36 million, compared with 15.94
million new vehicles for the same period in 2017. The The move signals the end of a rule put in place in
number of new-energy cars totaled 1.99 million. A total 1994 in the world’s largest auto market limiting foreign
of 58 cities had over 1 million automobiles each, and carmakers to owning 50 percent of any local venture.
seven cities had over 3 million, the bureau said. With the China implemented the policy to help domestic carmakers
increase of motor vehicles, the number of licensed drivers compete against more advanced international rivals.
also grew. China had 396 million vehicle drivers, with At least in the short term, carmakers focused on new-
women accounting for 29.3 percent (Xinhua, China Has). energy vehicles such as Tesla, an electric car company
that has been seeking to set up a wholly owned plant
A total of 14.07 million vehicles were sold from January in Shanghai. The looser rules could also raise pressure
to June 2018 in China, an increase of 5.57 percent on the on domestic carmakers such as Warren Buffett-backed
same period the previous year. In what can be a volatile BYD Co. (Shirouzu and Jourdan). China has previously
market, the growth rate was 2.57 percentage points said it will also reduce tariffs on imported cars, but it
higher than that forecast at the beginning of the year by has not specified when or by how much. Much of the
the country’s leading auto industry association. Sales of global auto parts industry has already moved to China
trucks also increased in the first six months of the year, as to avoid those tariffs. General Motor, Volkswagen and
well as sales of new energy vehicles, which continued to others have learned to profit handsomely with their local
grow on the back of the latest government subsidies and partners, which have developed fairly few homegrown
preferential policies. Statistics from China Association of models attractive enough to win over Chinese customers.
Automobile Manufacturers (CAAM) show that a total of Foreign automakers may want local partners anyway to
11.78 million passenger cars were sold in the first half smooth potential political problems and to win access to
year, an increase of 4.64 percent compared with the Chinese subsidies. China has been the only car making
same period in 2017. Total sales of passenger vehicles in nation of any significance that requires joint ventures
June reached 1.87 million units. The growth in SUV sales with local companies. Even countries like Brazil and
had been the highest among all passenger cars for the India, which have some of the world’s highest barriers to
past six years in China, but the May to June figures show imports, do not have similar joint venture requirements.
sedan sales taking back the lead. The association said Beijing insisted on the special rule when it joined the
that the fall in SUV sales after such market dominance WTO in 2001. Chinese trade negotiators wanted to make
was not unusual and that as the segment has come to sure that the country’s automakers, which were tiny by
meet market demand, manufacturers have begun to international standards then, would not be crushed by
shift their focus from SUVs back to sedans. About 412,000 foreign competition (Bradsher).
new energy vehicles were sold from January to June,
with segment sales increasing by 111.6 percent on the Tariffs are normally there to protect the industry,
same period last year. The new energy vehicles market is but the Chinese industry does not need protecting any
growing fast and looks to continue, with big deals being more. It is strong. Marco Schubert, president of FAW-
inked by global manufacturers in that area (Cao). Volkswagen’s Audi sales division, told Reuters that
international carmakers will likely ship in more cars when
Full Foreign Ownership of Automakers China starts to reduce import duties on vehicles. About
10 percent of Audi vehicles sold in China are imported,
China announced plans in April 2018 to allow full and that share will likely rise for Audi and its rivals, he said.
foreign ownership of automakers in five years. The change China has lowered auto tariffs several times since 1986,
184
level five cover complete automation in any condition. would scrap rules that require global automakers to work
The bold prediction was backed by Chinese consumers’ through local state-owned partners, an arrangement
optimistic attitudes towards the disruptive technologies. that forces them to share technology with potential
In China, more than 60 percent of survey respondents competitors. President Xi Jinping announced that Beijing
believe their families will be riding in autonomous cars in would ease ownership restrictions and cut auto import
the future (Jing). duties. Limits on foreign ownership of electric vehicle
producers will be eliminated this year, the Cabinet’s
According to the Ministry of Public Security, China had planning agency said. A similar repeal for makers of
319 million motor vehicles as of the end of June 2018. commercial vehicles in 2020 and passenger vehicles will
In the first half of 2018, the number of newly registered follow that in 2022 (Associated Press, China to Allow).
vehicles reached 16.36 million, compared with 15.94
million new vehicles for the same period in 2017. The The move signals the end of a rule put in place in
number of new-energy cars totaled 1.99 million. A total 1994 in the world’s largest auto market limiting foreign
of 58 cities had over 1 million automobiles each, and carmakers to owning 50 percent of any local venture.
seven cities had over 3 million, the bureau said. With the China implemented the policy to help domestic carmakers
increase of motor vehicles, the number of licensed drivers compete against more advanced international rivals.
also grew. China had 396 million vehicle drivers, with At least in the short term, carmakers focused on new-
women accounting for 29.3 percent (Xinhua, China Has). energy vehicles such as Tesla, an electric car company
that has been seeking to set up a wholly owned plant
A total of 14.07 million vehicles were sold from January in Shanghai. The looser rules could also raise pressure
to June 2018 in China, an increase of 5.57 percent on the on domestic carmakers such as Warren Buffett-backed
same period the previous year. In what can be a volatile BYD Co. (Shirouzu and Jourdan). China has previously
market, the growth rate was 2.57 percentage points said it will also reduce tariffs on imported cars, but it
higher than that forecast at the beginning of the year by has not specified when or by how much. Much of the
the country’s leading auto industry association. Sales of global auto parts industry has already moved to China
trucks also increased in the first six months of the year, as to avoid those tariffs. General Motor, Volkswagen and
well as sales of new energy vehicles, which continued to others have learned to profit handsomely with their local
grow on the back of the latest government subsidies and partners, which have developed fairly few homegrown
preferential policies. Statistics from China Association of models attractive enough to win over Chinese customers.
Automobile Manufacturers (CAAM) show that a total of Foreign automakers may want local partners anyway to
11.78 million passenger cars were sold in the first half smooth potential political problems and to win access to
year, an increase of 4.64 percent compared with the Chinese subsidies. China has been the only car making
same period in 2017. Total sales of passenger vehicles in nation of any significance that requires joint ventures
June reached 1.87 million units. The growth in SUV sales with local companies. Even countries like Brazil and
had been the highest among all passenger cars for the India, which have some of the world’s highest barriers to
past six years in China, but the May to June figures show imports, do not have similar joint venture requirements.
sedan sales taking back the lead. The association said Beijing insisted on the special rule when it joined the
that the fall in SUV sales after such market dominance WTO in 2001. Chinese trade negotiators wanted to make
was not unusual and that as the segment has come to sure that the country’s automakers, which were tiny by
meet market demand, manufacturers have begun to international standards then, would not be crushed by
shift their focus from SUVs back to sedans. About 412,000 foreign competition (Bradsher).
new energy vehicles were sold from January to June,
with segment sales increasing by 111.6 percent on the Tariffs are normally there to protect the industry,
same period last year. The new energy vehicles market is but the Chinese industry does not need protecting any
growing fast and looks to continue, with big deals being more. It is strong. Marco Schubert, president of FAW-
inked by global manufacturers in that area (Cao). Volkswagen’s Audi sales division, told Reuters that
international carmakers will likely ship in more cars when
Full Foreign Ownership of Automakers China starts to reduce import duties on vehicles. About
10 percent of Audi vehicles sold in China are imported,
China announced plans in April 2018 to allow full and that share will likely rise for Audi and its rivals, he said.
foreign ownership of automakers in five years. The change China has lowered auto tariffs several times since 1986,
184
