Foreign ownership plan hits Chinese cos
Beijing to phase out limits
SHANGHAI, April 18, (AFP): Shares in top Chinese manufacturing companies plunged Wednesday after Beijing announced plans to phase out ownership limits for foreign automakers, shipbuilders and aircraft firms.
The liberalisation meets a longtime demand of the United States and other countries seeking better access for their companies in the world’s biggest market for cars and one of the largest for air travel.
The country will this year end shareholding limits for new energy vehicle firms such as those that produce electric cars, the National Development and Reform Commission (NDRC) said Tuesday.
The move will be followed by commercial vehicles in 2020 and passenger cars in 2022.
China currently restricts foreign auto firms to a maximum 50 percent ownership of joint ventures with local companies.
China’s fifth-largest auto maker BAIC, which has a joint venture with Mercedes-Benz and another with South Korea’s Hyundai, collapsed over 10 percent in Hong Kong, while Brilliance China Automotive shed more than nine percent.
Guangzhou Automobile Group (GAC), which has joint ventures with Italian-American carmaker Fiat Chrysler and Japan’s Toyota, slumped 10 percent — the daily limit — in Shanghai before slightly recovering.
It closed down 8.40 percent in Shanghai and 8.45 percent in Hong Kong, where it is also listed.
GAC is China’s number six carmaker and it invested 1.2 billion yuan ($191 million) with a Chinese partner to develop smart new energy cars last year.
The nation’s biggest carmaker SAIC Motor Corporation, partner of Volkswagen and General Motors, ended down 0.06 percent after having shed more than four percent during trading.