Beijing Auto Show 2018: Automakers feel the fall-out of China-US trade tensions

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Global car makers are gathering at the Beijing International Automotive Exhibition that will unveil a hundred-and-eighteen new models. The event takes place at a time when trade frictions continue to rub China and the US the wrong way. Wang Qiwei has more.

It's the motor industry's biggest show time this year. Automakers are competing to wow visitors with their latest models. But trade frictions between the world's two largest economies seem to cast a cloud over the event. Chinese car makers believe it could affect their plans to break into the US market.

FENG XINGYA, PRESIDENT GUANGZHOU AUTOMOBILE GROUP CO., LTD. "That will have a great impact on us. Because when there is a twenty-one percent increase in tariffs, if we calculate it carefully, the increase in the cost will be more than twenty-one percent. Under such a situation, we are now doing studies on our price competitiveness and profit potential after any tariff increase."

The Chinese car market saw nearly 29 million units sold last year. And it could soon match those of the EU and the US combined. Earlier this month, the Trump administration threatened to add a 25 percent tariff on some Chinese products, including electric vehicles. And China hit back with an extra 25 percent tariff on US cars. Many are concerned about the ripple effect world wide.

JAMES CHAO ASIA-PACIFIC CHIEF, IHS MARKIT "Well, the automobile industry is global, so anything that happens to production in the US or China, any shifts in production, will affect the rest of the world."

But a Chinese official said on Wednesday that the country is working on a "substantial" tariff reduction for imported cars. Plans have also been released to remove restrictions on foreign investment in China's auto industry. The country will remove shareholding limits for new energy vehicle firms as soon as this year, then for makers of commercial vehicles in 2020, and passenger cars in 2022.

And for foreign automakers on edge over the China-US row, that's good news. WQW, CGTN.