It has been a complex mood in recent months that Ford Motors President Murali, who had hoped that China can liberalize joint ventures, is more restrictive than it has been.
On November 4, the National Development and Reform Commission issued a revised draft of the "Guidance Catalogue for Foreign Investment Industries" (hereinafter referred to as the "Catalogue") and publicly solicited opinions. The new directory has undergone the largest revision in 19 years based on the spirit of "further expanding opening to the outside world." However, the "car complete vehicle" that has attracted much attention is still explicitly included in the list of industries that restrict foreign investment and maintains the "red line" of the policy of "China's stock ratio of not less than 50%", that is, it will not be released for the time being.
However, as Mulally-like foreign car executives do not need to be depressed, there are indications that although this time has not relaxed the car company joint stock ratio than the limit, but also revealed that the liberalization is the general trend of the future automobile industry policy .
Reiterate the limitation of the ratio of vehicle joint stocks
Since the beginning of last year, there has been an expansion of imagination in terms of letting the total number of joint venture shares exceed the limit. In October last year, Ford Motor President Mulally said that the release of the equity ratio of the joint venture company in the Chinese market will definitely become a trend, "Ford is very willing to join."
More than a month later, Shen Danyang, spokesman of the Ministry of Commerce, said that the relevant departments will speed up the promotion of unified domestic and foreign investment laws and regulations, and further liberalize restrictions on foreign investment in steel, chemical, automotive and other manufacturing industries. Immediately afterwards, Xiao Chunquan, a spokesperson for the Ministry of Industry and Information Technology, stated that with regard to the issue of ratio of joint stocks in the automobile and other industries, the Third Plenary Session of the 18th CPC Central Committee put forward new requirements and plans for further opening up, and the Ministry of Industry and Information Technology will earnestly study and implement.
If the above representation still stays on paper, then the recent increase in the proportion of the company's shareholding in FAW-Volkswagen will be considered as a substantial signal that the joint venture shares will be released from restrictions.
Not only that, compared to the “Catalogue†published on November 4th and the “Catalogue†published in 2011, the revised draft has significantly reduced the number of restricted items, from 79 to 35. And further liberalize foreign capital ratio restrictions, "joint venture, cooperation," the number of entries reduced from 43 to 11 articles, "Chinese party holdings" entry number reduced from 44 to 32 articles.
"The revision of the "Catalogue" was the largest since the publication of the "Catalogue" in 1995, "said Wang Dong, an inspector from the Department of Foreign Investment of the National Development and Reform Commission. The purpose of the revision is to better implement the decentralization of the government. Expand opening up and create a good investment environment. In the future, more and more restrictions will be reduced, so that the supervision of domestic and foreign investment is basically the same, and the two-way balance will be achieved.
However, what was unexpected was that this time the “automobile†was still explicitly included in the list of foreign investment industries. The "Catalogue" emphasizes that for Chinese automobiles, special vehicles and motorcycle manufacturers, the Chinese stock ratio should not be less than 50%. The same foreign company can establish two domestic joint ventures that produce the same kind of complete vehicle products in China, such as a joint venture with China. Partnerships and mergers with other domestic automobile manufacturers are not subject to restrictions.
The Sino-US free-trade game has caused delays?
Under the general trend of opening up, why is the ratio of automobile joint ventures still standing still? “This time the restrictions on the number of joint ventures are not opened are likely to be the result of the international game investment agreement.†Zhang Zhiyong, an automotive industry analyst, told Nandu reporters that in the process of China becoming an exporter of investment, it will inevitably encounter International negotiations on investment and trade agreements. For example, whether the number of joint venture shares is more than the limit is used as a bargaining chip in the game.
For example, Li Keqiang, the country’s prime minister, previously stated clearly in the article entitled “Let Innovation Open to Lead Sino-German Cooperation†in the German “Le Mondeâ€: “The Chinese side will actively consider the request of Volkswagen AG to increase the proportion of shares in the joint venture of FAW-Volkswagen. We also hope that Germany will allow qualified Chinese companies to bid for German high-speed rail projects."
During the “two sessions†this year, Miao Wei, Minister of the Ministry of Industry and Information Technology, stated that in view of China's accession to the TPP negotiations, automobile joint ventures face pressure from opening up, and within the jurisdiction of the Ministry of Industry and Information, such as steel and chemical fiber, they will release joint venture shares in an orderly manner over time. , "The auto industry will release it later."
In fact, China hopes to join the Pacific Strategic Economic Partnership Agreement (TPP) promoted by the United States as soon as possible, and to use this open force mechanism to promote a new round of reforms. However, at this stage, China’s industrial policy, such as the limited ratio of 50:50 joint ventures in the automotive industry, is likely to cause industries that are more important than the auto industry to face the same restrictions in foreign countries. Therefore, under pressure, China’s auto joint stock ratio Restrictions policies may also make adjustments.
What is noteworthy is that, unlike before, the current game between China and the United States in the economic and trade agreement has entered a new round. The “Diplomat†website published an article on November 4th saying that the United States is putting pressure on China to prevent China from issuing a “feasibility study†on the Asia Pacific Free Trade Agreement (FTAAP) at the end of APEC and establishing the free trade zone by 2025. Communique.
It is reported that after the completion of the FTAAP, U.S. exports will increase by 626 billion U.S. dollars, and China's exports will increase by 1.6 billion U.S. dollars. While the role of TPP is relatively small, US exports can only increase by 191 billion U.S. dollars, while China will lose 100 billion U.S. dollars in exports due to trade shifts. Moreover, the lower standard and more inclusive FTAAP may not be conducive to the United States' use of the TPP to increase the market freedom and intellectual property protection of the countries in the region.
Some analysts pointed out that the automobile industry occupies an important position in the economic and trade exchanges between China and the United States. At the same time, there is no lack of competitors in the Chinese auto market that are irrelevant to the position of the American auto brand market. Therefore, the automobile industry policy is currently in Sino-US economic and trade relations. In the game is a "trump card".
In addition, maintaining the current 50:50 limit for joint-venture companies is also the best option for the current interests of the Chinese auto industry. Dongfeng Infiniti executive deputy general manager Lei Xin, the new joint venture company announced in September this year, told Xindu that the current 50:50 limit of joint venture car company stocks can enable shareholders to achieve a balanced and uniform interest in joint venture companies, and is beneficial to joint ventures. The company's various decisions have been smoothly promoted. “From the point of view of efficiency and performance, the equivalent joint venture ratio is the most viable option.â€
Only to discuss "how to let go"?
"The "Catalogue" is merely a reiteration of the current stock-to-share ratio policy and cannot be used as a basis for judging the future automobile joint-venture policy." Zhang Zhiyong stated that the "Automotive Industry Development Policy" is the basis for defining joint ventures, etc. The company's equity ratio limit was derived from the "Automotive Industry Development Policy" in 2004 and the revised policy provisions in 2009. Zhang Zhiyong emphasized that the restriction on the release of joint venture stocks in the future is a general trend in the development of the automotive industry.
“At present, a number of automotive industry policy development departments have reached a consensus on the release of joint-venture vehicles and shareholding restrictions in the future. However, the exact details of when to let go and how to liberalize it are not yet clear,†a source told a Southern Metropolis reporter.
"The opening of the joint venture shares is an inevitable trend," said Zhang Li, deputy director of the Comprehensive Strategic Research Department of the Ministry of Commerce's Research Institute. In the new round of reform and opening up, the goal is to make the market more dynamic and generate more kinetic energy. This further opening up is an inevitable trend of industrial development.
As for the concern that “relaxing the joint venture company will kill China’s autonomous automobile industryâ€, Zhang Li stressed that after liberalizing the share ratio, the foreign company will import more models, technologies and services in order to obtain more profits. Ideas, etc., and lead to more intense competition. In this process, independent brands may have to experience “waves of sand and sand.†Only by drawing on advanced experience for their own speed, can they not be eliminated.
However, Zhang Zhiyong said that although the restriction on the number of joint ventures in autos is a general trend, it cannot be liberalized for the time being. Because domestic automakers and Chinese brand cars are still not mature enough, they also need time and market space to nurture. Once released, it will have a strong impact on the rapidly growing Chinese brand cars.
Related key components of new energy vehicles are expected to become investment
It is worth noting that in the newly revised Catalogue, the ratio of foreign-invested shares of "key parts and components for new energy vehicles" was cancelled. "Manufacture of key parts and components for new energy vehicles" has become a field in which the newly revised Catalogue encourages foreign investment.
"Catalogue" clearly stipulates that "the production of key components for new energy vehicles" includes: energy-type power batteries, battery cathode materials, battery separators; battery management systems, motor management systems, electric vehicle electronic control integration; electric vehicle drive motors, vehicles DC/DC, high-power electronics; plug-in hybrid electromechanical coupled drive system.
It is understood that in 2004, China has removed its shareholding limit on foreign investment in the auto parts sector. In 2011, the National Development and Reform Commission demanded that the proportion of foreign energy (shareholdings) for key components of new energy vehicles should not exceed 50%.
As for the fast-growing new energy auto industry, the impact of the liberalization of this foreign-capital stock ratio remains to be seen.
As for the industry’s speculation about “traditional foreign auto parts and stocks ratio policies or changesâ€, it is not reflected in the newly revised “Catalogueâ€. In the “encouraged foreign investment†subcategory, “car engine manufacturing and engine development are still included. Organizational construction, automotive key parts manufacturing and key technology research and development, automotive electronic device manufacturing and R&D, and other automotive components.
After the National Development and Reform Commission issued an anti-monopoly price fine for 12 Japanese parts and components companies in August this year, whether China will introduce a new policy to restrict the establishment of foreign-funded auto and parts and components companies to establish wholly-owned companies in China had once caused speculation.
Another noteworthy content is that the newly revised Catalogue emphasizes that foreign investors are encouraged to invest in research and development. Obviously, whether it is for the traditional vehicle industry or for new energy vehicles, accelerating domestic technological upgrading of new energy vehicles by attracting foreign capital is also the subject of the revised draft.
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