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Chief WTO negotiator anticipates next decade of China (2)

(Global Times)

08:13, September 16, 2011


China’s chief WTO negotiator Long Yongtu. Photo: CFP

Automaking competitive

In terms of market openness, the auto industry is a good example, said Long. “Cars are no longer owned by the few. Many families own cars now. It’s the biggest comfort to me as a negotiator, as the policy changes have benefited the people.”

China used to levy a tariff of 150 to 200 percent on imported cars, as well as applying an import quota before it joined the WTO, in order to protect the domestic auto industry.

After joining the WTO, however, the tariff on imported cars had to be significantly reduced, and is now 13.4 percent on average. “With giant foreign carmakers entering the local market to compete, it is the Chinese automakers and consumers who benefited most. The auto industry can only develop in an open, competitive environment,” said Long.

China overtook the US to become the world’s largest auto market in 2009. In 2010, production and sales topped 18 million units. On average, there is now one car among 17 Chinese people, whereas in India there is one among 56 people.

The country’s automakers are now more competitive, and maybe it’s time for China to lift the 50-50 limit for joint ventures and allow foreign carmakers to set up wholly owned companies in China, Dirk Moens, secretary-general of the European Union Chamber of Commerce, told the Global Times.

“From a competition perspective, I personally believe that China’s auto industry is strong enough to compete globally. But the authorities might still consider the big picture and think that it’s a little too early to totally open the market as the auto industry has a long supply chain and provides a large number of jobs and the potential impact could be huge,” he said.

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