On December 27, the National Development and Reform Commission and the Ministry of Commerce issued Order No. 47 and Order No. 48, respectively, issuing the Special Administrative Measures for Foreign Investment Access (Negative List) (2021 Edition) and the Special Administrative Measures for Foreign Investment Access in Pilot Free Trade Zones (Negative List) (2021 Edition), which came into effect on January 1, 2022.
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According to the newly promulgated Special Administrative Measures for Foreign Investment Access (Negative List) (2021 Edition), the state will abolish the restriction on foreign ownership in passenger car manufacturing and the restriction that the same foreign investor can establish two or fewer joint ventures in China to produce similar vehicle products. Previously, in the "Automobile Industry Policy" issued in 1994, it was stipulated that the foreign capital of vehicle enterprises in china's joint venture projects should not exceed 50%. Because the foundation of China's automobile industry at that time was relatively weak, it could only hope to exchange technology through the market, and this move was also to protect China's independent automobile industry from being impacted by foreign brands.
tesla
However, with the continuous development of independent brand car companies, the state is also gradually relaxing this policy restriction. In 2018, the state canceled the foreign ownership restrictions on special vehicles and new energy vehicles, Tesla is the first foreign car company to enjoy this policy, and the emergence of Tesla has also made the domestic new energy vehicle market more dynamic, playing a good catfish effect.
After the policy is about to be implemented next year, the shareholding ratio of some joint venture brands may change. Due to the current joint venture brand in the domestic market is increasingly squeezed by independent brands, coupled with the serious phenomenon of lack of core in automobiles in recent years, some joint venture brands have suffered a lot of losses, in order to reduce losses, some shareholders may have the idea of quitting. With the introduction of the new policy, the entire domestic automobile market, including joint venture brands, may usher in a major reshuffle.