An Interpretation of "Constraints on Foreign Investment in Complete Vehicles"

A few days ago, the National Development and Reform Commission and the Ministry of Commerce jointly issued the new "Guided Catalogue for Foreign Investment Industries." Among them, the automobile manufacturing items have been removed from the encouraged category. At the same time, consideration has been given to the cultivation of strategic emerging industries, and encouraged categories in the foreign investment industry's guidance catalogue have increased. New energy automobile key components and other industries, as well as nine service industries including motor vehicle charging stations.

Explain the need of a country to accomplish its goal of reducing greenhouse gas emissions

For the country’s New Deal: restricting foreign investment in vehicles, and encouraging the addition of key components for new energy vehicles. It is also related to environmental protection. China is a party to the "Kyoto Protocol" and must complete the goal of reducing greenhouse gas emissions. For new energy alternatives to gasoline and diesel, of course, carbon dioxide, a greenhouse gas, can be reduced. From the point of view of sustainable development, the country is understandable.

Interpretation of two fertilizer water does not flow other fields

The Chinese people’s own money is best earned by their own people. China’s vehicle manufacturing capacity is already strong. Whether it is a joint venture or a sole proprietorship, the production capacity of the vehicle has greatly improved, and the annual output of domestic automobile manufacturers has been It has reached 18 million and ranks among the top in the world. In particular, the rapid growth of domestic self-owned brands also makes the space for foreign investment to play a relatively limited role, and the elimination of auto vehicle manufacturing from the encouraged category also takes into account the encouragement of better development of domestic enterprises.

“However, the development of domestic related industries in the field of new energy vehicles is still relatively large compared to international ones. At present, there is no case of successful commercial operation. Domestically, the key components of new energy vehicles, batteries, engines, transmissions and other manufacturing fields are still short. board.

In fact, the state's policy on the joint venture of vehicles is continuously tightening. In the new "Automotive Industry Development Policy" recently released, the entry threshold for foreign investment projects has been improved, including the requirement that new passenger car projects must have matching engines. Production, and continue to adhere to the foreign investment in 50% of the total vehicle project restrictions, while standardizing the automotive product identification, protection and support the development of independent brands.

Explain the possible strategies of the three foreign investors

A joint venture cannot change technology. From the perspective of the industry, new joint venture projects are no longer needed. Now the big brands have basically entered China, and the remaining small brands are not very much needed in China. The revised "Catalogue" removes the entire automobile manufacturing from the encouraged category to the permitted category. Although there are adjustments, it has not been explicitly prohibited. Therefore, it will not affect the joint venture companies that have entered China, and at the same time it will introduce new foreign investment projects. The current "Automobile Industry Development Policy" still implements foreign investment access management. However, the policy does not specify whether it is possible or not. "The joint venture company should not start from the vehicle first, but can upgrade from the engine or the locally developed 'curve to save the country' to the entire vehicle, depending on who has the strong ability to move."