China fur­ther opens auto bat­ter­ies, elec­tron­ics to for­eign in­vest­ment

China Daily (Hong Kong) - - BUSINESS - By JING SHUIYU jing­shuiyu@chi­

China will fur­ther open up the seg­ments of bat­ter­ies of new en­ergy ve­hi­cles and au­to­mo­tive elec­tron­ics to for­eign in­vest­ment, to level the play­ing field in the world’s largest auto mar­ket, ac­cord­ing to a re­vised guid­ance by the Na­tional Devel­op­ment and Re­form Com­mis­sion and the Min­istry of Com­merce re­leased on Wed­nes­day.

“Such a pol­icy shows that the gov­ern­ment is work­ing to level the play­ing field and en­cour­age fair eco­nomic ac­tiv­ity. Lo­cal bat­tery man­u­fac­tur­ers will have more in­cen­tives to in­no­vate and im­prove the qual­ity of their prod­ucts,” said Wang Bing­gang, an ex­pert work­ing on the new en­ergy ve­hi­cle re­search project led by the Min­istry of Science and Tech­nol­ogy.

Wang also said lo­cal gov­ern­ments need to strike a proper bal­ance when im­ple­ment­ing rel­e­vant poli­cies.

“It’s a pos­i­tive sig­nal that the gov­ern­ment has grad­u­ally opened up the in­dus­try. Lo­cal gov­ern­ments, how­ever, should avoid over­re­act­ing to such an ad­just­ment. They shouldn’t come up with poli­cies much more pref­er­en­tial to for­eign com­pa­nies than lo­cal coun­ter­parts. Oth­er­wise, it would ham­per the ef­forts to­ward cre­at­ing a fair and com­pet­i­tive en­vi­ron­ment,” Wang said.

The min­istry of com­merce is seek­ing pub­lic opin­ion un­til Jan­uary 2017 on the re­vised guid­ance on in­dus­tries open to for­eign in­vest­ment. Be­sides the man­u­fac­tur­ing sec­tor, the guid­ance also of­fers more for­eign in­vest­ment ac­cess to the ser­vices sec­tor and the min­ing in­dus­try, and re­duces the num­ber of re­stric­tive mea­sures from 93 to 62.

In re­cent years, the grow­ing new en­ergy ve­hi­cle in­dus­try has been at­tract­ing the at­ten­tion of man­u­fac­tur­ers both in China and over­seas.

Mercedes-Benz, a unit of the Ger­man com­pany Daim­ler AG, plans to build a bat­tery plant and make elec­tric cars in China, Bloomberg re­ported on Wed­nes­day.

“It’s our strat­egy to lo­cal­ize pro­duc­tion in China, and that goes for elec­tric cars too,” said Hu­ber­tus Troska, head of Chi­nese op­er­a­tions at Mercedes par­ent Daim­ler AG on Mon­day. “China’s gov­ern­ment has a strate­gic goal to fire up elec­tric ve­hi­cles, aimed at im­prov­ing air qual­ity but clearly also at less­en­ing de­pen­dence on oil im­ports.”

Car­mak­ers from Volkswagen AG to Gen­eral Mo­tors Co are boost­ing pro­duc­tion in China as sales make up an in­creas­ing share of their bot­tom line. Mercedes al­ready builds most of its ve­hi­cles sold in China lo­cally, in­clud­ing longer ver­sions of the E-Class and the C-Class that are pop­u­lar among do­mes­tic buy­ers. It also makes a plugin hy­brid C-Class, us­ing bat­ter­ies made by lo­cal sup­pli­ers.

Shaanxi J&R Op­ti­mum En­ergy Co Ltd, a listed Chi­nese com­pany, also made in­roads into the lithium-ion au­to­mo­tive bat­tery in­dus­try in Novem­ber by ac­quir­ing a 19.9 per­cent stake in Al­tura Min­ing Ltd, an Aus­tralian sup­plier of lithium raw ma­te­ri­als, for A$41.6 mil­lion ($30.69 mil­lion).

In China, the out­put of lithi­u­mion au­to­mo­tive bat­ter­ies was 16.9 GWh in 2015, while the de­mand is pro­jected to reach 125 GWh in 2020, ac­cord­ing to data com­piled by Si­no­link Se­cu­ri­ties Co.

Bloomberg con­trib­uted to this story

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