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China to liberalize foreign ownership rules

April 17, 2018

China has finally announced a timeline for opening up its manufacturing sector to foreign investors. The move comes as current restrictions increasingly trouble companies, including German carmakers.

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Chinese workers
Image: picture-alliance/dpa

China on Tuesday elaborated on when it would scrap foreign ownership limits for automakers, shipbuilders and aircraft producers.

The liberalization of current rules had been a longtime demand of the US, European and other nations seeking better access for their companies to the world's second-largest economy.

China currently restricts foreign auto firms to a maximum of 50 percent ownership of joint ventures with local companies. Beijing will this year end shareholding limits for new-energy vehicle firms such as electric carmakers, according to the National Development and Reform Commission (NDRC).

This will be followed by the removal of ownership obstacles in 2022 for makers of commercial vehicles and passenger cars. After a five-year transition period, the auto sector would lift all current restrictions, the NDCR said.

China's trade and investment policy

Pledges galore

"We will support Chinese and foreign companies in achieving common development on a level playing field," the commission pledged. It added the liberalization would encourage greater exchanges of capital, technology, management and personnel of Chinese and foreign firms.

The NDCR added the shipbuilding industry would later this year do away with any restrictions for foreign investors designing, making or repairing vessels.

Restrictions would also be lifted on foreign ownership of aircraft manufacturing firms this year, including companies involved in the production of large-body commercial airliners, regional jets, helicopters, drones and blimps.

China pledges to open markets

hg/jbh (AFP, Reuters)