China eases foreign investment limits: Global car brands expected to open more wholly owned plants
In this year's government work report, Premier Li Keqiang said China will give foreign businesses broader market access and remove foreign investment limits in more areas.
China has been the world's largest car market for the last 10 years. But sales and production are slowing down. Now authorities say some restrictions on foreign firms can be removed.
Take Toyota, for example. Its joint venture with First Automotive Works, a 50-50 split in ownership, is why the car is called FAW-Toyota. During this year's National People's Congress, Chinese Premier Li Keqiang said China will continue to open its economy to attract more foreign investment.
Foreign car brands have to set up joint ventures with local automakers to open factories in China. /CGTN photo
Premier Li Keqiang said China will give foreign businesses broader market access, shorten the negative list for foreign capital, and allow more wholly foreign-owned operation in more areas.
The 50 percent equity cap on the New Energy Vehicle Sector was removed in 2018. Construction of Tesla's giga factory in Shanghai is underway and it's supposed to start production by the end of this year.
Elon Musk, CEO of Tesla, told CGTN that the opening-up policy has been a steady movement and the company feels very optimistic about its long-term future in China.
Domestic carmakers say they may face short-term pain, but market competition is good for China's auto sector in the long run. /CGTN photo
Jens Puttfarcken, Porsche China's CEO, told CGTN that he thinks the changes are very positive, because it gives Chinese customers the possibility of a wider choice of options regarding their cars.
The new foreign investment law aims to ensure that Chinese and foreign capital compete on a level playing field.