Gasgoo.com (Shanghai September 11) - Industry development was a major topic of this year's International Forum on Chinese Automotive Industry Development, with representatives from the National Development and Reform Commission revealing that the government is currently considering making modifications to its current industry development policies. The Forum the equivalent of the annual Davos World Economic Forum for the Chinese automotive industry.
China first released the Policy on Development of Automotive Industry a decade ago, which aimed to establish a definite direction development for the industry. However, changing macroeconomic conditions have led many industry insiders and even government officials themselves calling for a new set of policies more appropriate for the current market.
According to China Center for International Economic Exchanges Permanent Vice Chairman Zheng Xinli, the current policies fail on three different levels. First, when the policies were originally being drafted, they failed to predict the rapid development of the private automobile market. Secondly, the policies have failed to sufficiently encourage the Chinese automotive industry to make new innovations. Thirdly, the policies did not help domestic own brand manufacturers reap the benefits of the vast Chinese automobile market.
Whether or not enterprises from other industries should be allowed to invest and operate in the automotive industry is another topic of debate. According to current legislation, manufacturers from other industries are barred from entering the automotive industry. This restriction has come under fire, with many industry insiders believing it be made laxer. Even one of the original drafters of the Policy on Development of Automotive Industry stated that he believes that restrictions be loosened for new energy automobiles, so that manufacturers of core parts such as batteries, electric motors and electronic control units can help contribute to the industry's development.
Commenting on the equally contentious topic of Sino-foreign automotive joint venture enterprises, China Automotive Technology and Research Center Director Zhao Hang stated that he believed they should not allowed to be extend their partnerships indefinitely, instead development of domestic own brand enterprises should be encouraged. Mr. Zhao advocates in the introduction of legislation that puts a limit on how long JV partnerships can be extended for in order to ensure the competitiveness of the market.
