Mexican Media Brands
China Drops 50% Ownership Cap for Motorcycles, Batteries
China’s central government has decided to exempt motorcycle and battery makers from a 22-year-old rule that limits foreign ownership in Chinese companies to 50%. The new policy will apply to foreign companies that create free trade zones in Guangdong, Fujian, Shanghai or Tianjin, Bloomberg News reports.
Share
China’s central government has decided to exempt motorcycle and battery makers from a 22-year-old rule that limits foreign ownership in Chinese companies to 50%.
The new policy will apply to foreign companies that create free trade zones in Guangdong, Fujian, Shanghai or Tianjin, Bloomberg News reports.
The government says it will phase in the new rule slowly. The original 50% limit on foreign ownership was set in 1994. Its goal was to force foreign companies to partner with domestic businesses, thereby enabling the latter to gain technological prowess.
But the policy has been criticized in recent years for shielding local companies from developing their own brands or becoming more competitive in their own right. Last month the chair of the National Development and Reform Commission said the government was reviewing the 50% rule.
Analysts predict China will eventually lift the 50% cap for foreign carmakers. But the timing isn’t clear. Proponents of the 50:50 rule say China’s domestic vehicle manufacturers need more time to develop enough volume and technical capabilities to compete with foreign rivals, Bloomberg notes.
RELATED CONTENT
-
TRW Multi-Axis Acceleration Sensors Developed
Admittedly, this appears to be nothing more than a plastic molded part with an inserted bolt-shaped metal component.
-
On Fuel Cells, Battery Enclosures, and Lucid Air
A skateboard for fuel cells, building a better battery enclosure, what ADAS does, a big engine for boats, the curious case of lean production, what drivers think, and why Lucid is remarkable
-
GM Seeks to Avert U.S. Plant Shutdowns Linked to Supplier Bankruptcy
General Motors Co. says it hopes to claim equipment and inventory from a bankrupt interior trim supplier to avoid being forced to idle all 19 of its U.S. assembly plants.
