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China's Tougher Car Procurement Policy Provokes European Threats
Summary:In a retaliatory move, the Europe Union’s main lobbying group has warned that Chinese carmakers might face problems on the continent.


Economic Observer Online
By Liu Xiaolin (刘晓林 )
Mar 2, 2012
Translated by Ma Zheng
Original Article: [Chinese]

 


Update: This article has been altered in order to correct an error which occured in translating the EU Chamber of Commerce's comments into Chinese. The article originally claimed that the chamber planned to "encourage countries in the EU to introduce retaliatory measures." The EU Chamber of Commerce did not make this comment.

Following China’s move to block officials from purchasing foreign brand cars, the Europe Union’s main lobbying group has warned Beijing that its national carmakers, such as Great Wall Motor Company Limited and Geely Automobile Holdings, might be prevented from opening new factories on the continent.

Last Friday, the Ministry of Industry and Information Technology published a draft list of 412 car models that are eligible for government procurement. None of those models were foreign brands.

The list follows guidelines issued three months ago, which forbid local governments from spending more than 180,000 yuan on each vehicle and limit them to a maximum engine capacity of 1.8 liters.

Around four fifths of the cars driven by Chinese officials are foreign brands, and almost half of those are either Volkswagens or Audis.


One person working in the industry told the EO that the draft list represents the biggest challenge for German, Japanese and American car makers since their cars entered China.

The reform represents a big opportunity for China’s domestic brands, such as First Automobile Group, which said that it will invest 1.98 billion yuan to expand production of its Red Flag models.

The implantation of the reform is still unclear and one person told the EO that the revised list won’t apply to vehicles for officials holding the rank of minister and above.


Links and Sources
The Wall Street Journal China Sets Curbs On Official Cars

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