M&A

Fully throttled

Are foreign carmakers still welcome to invest?

Did a new policy – announced during the festive period – have foreign car bosses choking on their turkey? For the past three decades, foreign automakers have been encouraged to build car plants in China. Are they still welcome?

Suddenly it is more ambiguous. In late December the National Development and Reform Commission (NDRC), the country’s top economic planning body, dropped the car industry from its official list of businesses in which overseas investment is encouraged.

“For the first time, foreign investors are not welcome to build car factories in China,” reported the South China Morning Post.

Yet what may have first seemed to be major news might actually prove less so. The Shanghai Daily then quoted an official from the NDRC who said the move wouldn’t affect existing Sino-foreign JVs. As all the major foreign firms are already in JVs, the new policy may have little practical impact. But as with all Chinese regulations, we’ll need to wait to see how they’re implemented.


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