Fully throttled

Are foreign carmakers still welcome to invest?

Fully throttled

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.

© ChinTell Ltd. All rights reserved.

Sponsored by HSBC.

The Week in China website and the weekly magazine publications are owned and maintained by ChinTell Limited, Hong Kong. Neither HSBC nor any member of the HSBC group of companies ("HSBC") endorses the contents and/or is involved in selecting, creating or editing the contents of the Week in China website or the Week in China magazine. The views expressed in these publications are solely the views of ChinTell Limited and do not necessarily reflect the views or investment ideas of HSBC. No responsibility will therefore be assumed by HSBC for the contents of these publications or for the errors or omissions therein.