China to lift for­eign own­er­ship lim­its

Bangkok Post - - BUSINESS - ALBEE ZHANG RYAN MCMORROW

BEI­JING: China an­nounced yes­ter­day a time­line to open up its man­u­fac­tur­ing sec­tor in­clud­ing scrap­ping own­er­ship lim­its for for­eign au­tomak­ers, ship­builders and air­craft firms — ad­dress­ing a con­tentious is­sue in its trade dis­pute with the United States.

The lib­er­al­i­sa­tion meets a long­time de­mand of the US and other coun­tries seek­ing bet­ter ac­cess for their com­pa­nies in the world’s big­gest car mar­ket and one of the largest mar­kets for air travel.

China cur­rently re­stricts for­eign auto firms to a max­i­mum 50% own­er­ship of joint ven­tures with lo­cal com­pa­nies.

The coun­try will this year end share­hold­ing lim­its for new en­ergy ve­hi­cle firms such as those that pro­duce elec­tric cars, ac­cord­ing to the Na­tional De­vel­op­ment and Re­form Com­mis­sion (NDRC).

“The move will be fol­lowed by com­mer­cial ve­hi­cles in 2020 and pas­sen­ger cars in 2022, when it will also abol­ish re­stric­tions lim­it­ing for­eign au­tomak­ers to two joint-ven­ture part­ners,’’ the NDRC said in a state­ment.

“Af­ter a five-year tran­si­tion pe­riod, the auto sec­tor will lift all re­stric­tions,” it said.

Un­der the cur­rent setup, for­eign car­mak­ers must trans­fer pro­pri­etary tech­nol­ogy to the joint ven­ture com­pa­nies they set up — the is­sue of forced tech­nol­ogy trans­fer has been a top con­cern for the Trump ad­min­is­tra­tion.

“China’s full open­ing of the man­u­fac­tur­ing in­dus­try is a clear in­di­ca­tion of our op­po­si­tion to trade and in­vest­ment pro­tec­tion­ism, and shows our clear sup­port to widen­ing and deep­en­ing the de­vel­op­ment of eco­nomic glob­al­i­sa­tion,” the NDRC said.

“Through the full lib­er­al­i­sa­tion of the man­u­fac­tur­ing in­dus­try, we will sup­port Chi­nese and for­eign com­pa­nies in achiev­ing com­mon de­vel­op­ment on a level play­ing field,” it said.

It said it hoped the lib­er­al­i­sa­tions would en­cour­age greater ex­changes of cap­i­tal, tech­nol­ogy, man­age­ment and per­son­nel of Chi­nese and for­eign firms.

Pres­i­dent Xi Jin­ping an­nounced the plans for the auto in­dus­try last week with­out giv­ing any time­line.

Xi’s an­nounce­ment was among a se­ries of mea­sures seen as po­ten­tial con­ces­sions to Trump in the face of a po­ten­tial trade war, in­clud­ing a pledge to lower car tar­iffs this year.

Still, af­ter Xi struck the con­cil­ia­tory note in his speech, Trump showed no in­di­ca­tion he would back down from im­pos­ing the threat­ened tar­iffs on $150 bil­lion worth of Chi­nese goods, and Bei­jing said it was ready to hit back in kind.

Of­fi­cials in Wash­ing­ton say they have grown wary of China’s end­less prom­ises that of­ten re­sult in lit­tle ac­tion. The NDRC an­nounce­ment could al­lay those com­plaints by giv­ing spe­cific dates for com­ple­tion of the re­forms.

The NDRC said t he ship­build­ing in­dus­try would this year scrap for­eign own­er­ship re­stric­tions on firms de­sign­ing, mak­ing and re­pair­ing ves­sels.

It will also lift re­stric­tions on for­eign own­er­ship of air­craft man­u­fac­tur­ing firms this year, in­clud­ing those that make large-body com­mer­cial air­lin­ers, re­gional jets, he­li­copters, drones and blimps.

But in an­other move that could ex­ac­er­bate tensions, China de­cided yes­ter­day to slap pro­vi­sional anti-dump­ing du­ties on im­ports of US sorghum, say­ing its do­mes­tic in­dus­try has suf­fered from “sub­stan­tial dam­age”..

The Com­merce Min­istry said it or­dered importers to pay Chi­nese cus­toms a de­posit amount­ing to 178.6% of the value of im­ported sorghum.

The min­istry will make a fi­nal rul­ing af­ter fur­ther in­ves­ti­ga­tion, which may lead to anti-dump­ing tar­iffs.

The US shipped 4.8 mil­lion tonnes of sorghum to China last year, a four­teen-fold in­crease from 317,000 tonnes in 2013, said the min­istry’s trade rem­edy and in­ves­ti­ga­tion bu­reau.

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