China to issue new policy on auto industry

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Last updated at: (Beijing Time) Wednesday, November 19, 2003

China to issue new policy on auto industry

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China will issue a new industrial policy to relax control on automobile makers and avoid duplicated projects, said Shen Ningwu, vice secretary-general of the China Association of Automobile Manufacturers, here Tuesday.

Shen said at a China-Japan-Korea business forum being held in Beijing that the new policy is expected to be issued in two months.

According to the policy, China encourages private and foreign capital to enter the automobile sector, but the floor share for the Chinese side in foreign-funded car-makers will remain 50 percent.

China will encourage individuals and families to buy cars which are energy-saving, less-polluting and cheap, Shen said.

An irrational limitation on car purchase will be eliminated and the service sector, including credit loans, sale of used cars and components will be enhanced to boost the market, Shen noted.

The China Banking Regulatory Commission agreed last October that companies with total assets over four billion yuan (480 million dollars) and registered capital over 500 million yuan (60 million dollars) are eligible to provide auto loans to customers.

China's auto production will hit 4.2 million to 4.3 million vehicles this year and six million to seven million in 2005, Shen said.

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