With the liberalization of the equity ratio of the automobile industry, China's local enterprises and multinational companies will have both advances and retreats, and what kind of situation to adopt depends on the specific competitive situation and needs of enterprises.
Text / Zhao Ying
Entering 2022, the auto industry has quietly entered a new era – the shareholding ratio of joint ventures in the auto industry has been completely liberalized.
Liberalizing the shareholding ratio of joint ventures is a promise made by the Chinese government in recent years, but it will only be fulfilled in 2022.
With the promulgation of the 2021 edition of the Negative List for Foreign Investment Access, the restrictions on the joint venture share ratio of passenger cars have finally been abolished, and the auto industry has finally fully ended the restrictions on the joint venture share ratio.
The author originally thought that the psychological shock caused by this policy change had been digested in recent years. However, just after the New Year, many friends in the press called to inquire about the impact of the liberalization of the stock ratio in the automobile industry. If you think about it, we are walking through a historical juncture, and it is still necessary to write an article on the historical significance of this major change.
The Chinese government's auto industry protection policy, the author has done in-depth research.
Under the planned economy system, it seems natural that the automobile industry is protected by the government, but it has not stopped the import of automobiles, because the supply is seriously insufficient.
In the early days of reform and opening up, the government spared no effort to protect the automobile industry, basically relying on administrative regulatory means. On June 17, 1985, the Ministry of Foreign Trade promulgated the "Notice on Clarifying the Import License for Imported Automobiles", which controlled the import of automobiles through import licenses, which produced many rich people who speculated in license approval documents.
Later, in order to comply with international rules, administrative regulations were abandoned and changed to high tariffs of 100%-200%; later, relevant policies were formulated in the "Automotive Industry Industrial Policy" to protect them (the 50% share ratio limit is reflected in the industrial policy).
According to the author's research, the government's excessive protection, both difficult to support the rapid development of the automobile industry, but also protect the backward, in the domestic automobile supply shortage led to high prices in the environment, stimulated the repeated, low-level construction of automobile factories, the effect is not outstanding.
In the negotiations on accession to the WTO, a commitment was reached to reduce tariffs on the automobile industry (the vehicle tariff was reduced to about 20%), but the shareholding ratio was retained. Following China's full implementation of the WTO's tariff commitments on auto imports, in recent years, the Chinese government has further taken the initiative to reduce auto import tariffs and successively relaxed the restrictions on the share ratio of commercial vehicles. Now that the joint venture share ratio for passenger cars has been completely liberalized, the protective measures for the automobile industry that China insisted on when it joined the WTO have been basically abolished.
At the time of China's accession to the WTO, the total annual production and sales of China's automobile industry were only more than 2 million vehicles, of which 700,000 were cars. Nowadays, the total production and sales of China's automobile industry have long ranked first in the world, and the annual output of a major car company in China has greatly exceeded the total output of cars in the automobile industry that year.
China's auto industry has grown rapidly in an open competitive environment, and today it should be unafraid of external challenges.
In 2021, in China's auto market, self-developed car products have accounted for about 40%; China's auto exports have taken a leap forward, exceeding 2 million vehicles, entering the market of developed countries; China's new energy vehicle production ranks first in the world and is in a first-line position in technology.
Looking back at the development history of China's auto industry and the evolution of the government's auto industry protection policy, 2022 is indeed a historical moment for China's auto industry. China's auto industry has finally basically lifted the protection of the government, Chinese auto companies have finally basically relied on their own strength to fight in the commercial sea, and the visible hand of the government has finally moved away from the auto industry. China's auto industry has "graduated", and China's auto "enterprises" have graduated.
Of course, the challenges remain, and the task is still long.
The development process of China's automobile industry shows that only in the open market, give full play to the autonomy of enterprises, supplemented by appropriate and gradually reduced government support and protection, can promote the rapid development of the automobile industry. Government protection can only play a considerable role in certain specific times. Relying only on government protection, it is difficult for industries and enterprises to truly become competitive players in the market.
From the perspective of the development history of the global automobile industry (especially the development of the automobile industry in Japan and South Korea), the government's protection of the automobile industry can only be protected in a certain period of time and in certain fields, indefinite protection, and can only protect backwardness.
Judging from the historical experience of the development of the global and Chinese auto industry, even if the restriction on the share ratio is lifted, it will not have much impact on the development of China's auto industry.
Judging from the internal logic of the global development of the automobile industry, the lifting of the shareholding ratio restriction will not have much impact on the development of China's automobile industry.
When multinational companies enter a certain market, they must always consider their own strengths and weaknesses, limited and optimal allocation of resources, strategic needs in relevant markets, global strategic layout, technology, limited capital, product composition, market research and development and production factors, government regulations, market competition, cultural differences, consumer characteristics and other factors.
It is precisely because of so many factors that joint ventures can exist, and multinational companies need to find partners, not simply find a "leading party". Joint ventures are win-win games, not zero-sum games. Therefore, just changing the shareholding ratio does not necessarily change the original intention of the multinational company's joint venture.
Whether multinational companies continue to adhere to the original form of joint ventures in the Chinese auto market?
First, it depends on its own strength. The automotive industry is an asset-heavy industry, and even strong multinational companies need to diversify risks through joint ventures. Multinational companies that walk in Maicheng in the Chinese auto market are not uncommon. Even if joint ventures are adhered to, these enterprises are difficult to adhere to, and sole proprietorship is even more difficult.
Second, it depends on the strength and voice of the Chinese side in the joint venture. In general, the Chinese side naturally has the advantage of home games. If china is strong or equal, has enough voice and appropriate strategy, it can also influence the choice of multinational companies in the joint venture. Of course, if the Chinese side is weak (for example, Brilliance), there may also be a situation of foreign holding or even sole proprietorship.
Third, it depends on the field of competition. In the field of new energy vehicles, where Chinese auto companies have some advantages, foreign capital does not necessarily take the form of sole proprietorship, which is what we have seen.
In short, it is certain that the restrictions on the share ratio in automobile joint ventures will be abolished, and the competitive pattern in the automobile market will change greatly, but for China's automobile industry and Chinese automobile companies, it is not the sky that has fallen; for multinational companies, it is not a pie in the sky.
China's local enterprises and multinational companies will have both advances and retreats, and what kind of situation they adopt depends on the specific competitive situation and needs of enterprises. China's automobile industry has developed for nearly 70 years, the road is blue, the hardships and hardships overcome are unknown, is it worth worrying about just the stock ratio?
Looking at the winter scenery outside the window, I remembered a few sentences in Su Shi's "Dingfeng Wave": "Looking back at the place where Xiao Ser has always been, returning, there is no wind or rain or sunshine." "[Copyright Notice] This article is the original manuscript of Automan Media, and may not be reproduced without authorization.