China Maps out Development Strategy for Car Industry

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Last updated at: (Beijing Time) Wednesday, April 30, 2003

China Maps out Development Strategy for Car Industry

The State Development and Reform Commission is to invite recommendations from the public and industry insiders to help map out a new development strategy for China's car industry.

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The State Development and Reform Commission is to invite recommendations from the public and industry insiders to help map out a new development strategy for China's car industry.

The advice is expected to be essential to ward off blind investment and vicious competition and lead to the healthier development of the industry, the commission said yesterday.

The commission said the public's constructive ideas will be integrated into the current development policy for the car industry but it gave no further details.

China's car industry has developed quickly since 1994, when the first national policy on the industry was launched.

"The situation regarding the industry's further development has changed tremendously and we need to come to terms with this," the commission said.

Commission officials have already warned about the trend towards over-investment in the industry.

Ma Liqiang, director of the commission's Bureau of Economic Operations, said earlier this month that further capital input in the sector may result in risks due to over-investment and excessive production.

Official statistics indicate that between January and March this year, car production rose a year-on-year 120 per cent to 399,000, while output of all types of motor vehicles rose 54 per cent to 1.05 million.

Car assembly lines can be found in 23 of the Chinese mainland's provinces, autonomous regions and municipalities. Insiders and researchers said it is high time for the government to map out a policy to cool the development of the industry.

Lin Yueqin, a researcher with the Chinese Academy of Social Sciences, suggested that the government should devise a package of macroeconomic control measures to support competitive Chinese manufacturers. The researcher also suggested that China should take the lead in the field of electric cars.

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