Potential car buyers visit an auto show in Nanjing, Jan. 1. One Chinese official says that as domestic firms grow, foreign investment is becoming less important to the growth of China's auto industry. (Photo/Xinhua)
China will limit multinational automakers' involvement in car manufacturing with an amendment that places stricter rules on foreign investors in the industry, the Beijing Business Today reports.
"Chinese automakers are capable of making high-quality cars by themselves. They are able to produce more than 18 million cars a year, which has made this country the biggest market in the world," said Zhang Jianping, director of the National Development and Reform Commission's International Business Cooperation Department. "Under these circumstances, foreign investment will not be that necessary."
Automobile industry analyst Jia Xinguang said that the stricter rules will not greatly affect the remaining foreign investors in the auto manufacturing sector.
The amendment stipulates that a foreign investment in auto manufacturing will only be approved if the multinational carmaker in the deal agrees to also produce engines for the new cars, while shares in the joint venture will be kept at below 50%.
The amendment is set to take effect on Jan. 30.
Zhang Jianping 張建平
Jia Xinguang 賈新光