China strives for healthy growth of auto industry

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Last updated at: (Beijing Time) Tuesday, December 09, 2003

China strives for healthy growth of auto industry

A senior Chinese economic official said Monday that the Chinese government will not restrict the growth of China's auto industry, but guide it to healthy and rational development.

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A senior Chinese economic official said Monday that the Chinese government will not restrict the growth of China's auto industry, but guide it to healthy and rational development.

Minister in charge of the State Development and Reform Commission Ma Kai, who accompanied Chinese Premier Wen Jiabao on his current US visit, told a press conference that it is a really good thing to see that the auto industry in China has grown so rapidly in recent years.

The minister noted, however, there are indeed some problems in the process of the rapid growth of China's auto industry, such as disorderly development and insufficient scale of production. "China's auto industry cannot develop in a healthy manner if such a situation is not reversed," he said, noting that among the nation's 31 provinces and municipalities, for instance, 22 have capacities for manufacturing whole vehicles, with their annual output averaging 35,000 units. Very few Chinese automobile makers have capacities exceeding 100,000, and some even have capacity below 10,000.

As part of the move to regulate the sprawling auto industry, the Chinese government has drawn up a number of new policies concerning the auto industry after soliciting the opinions and suggestions of various sectors, including some foreign auto makers, Ma said.

"This should come as good news for major US auto makers," he said, adding the new policies concerning China's auto industry have discarded those parts that are inconsistent with WTO requirement, such as lifting the restriction on foreign auto makers in terms of foreign exchange balance and ratio of export.

The new regulation has also simplified the procedure for administrative examination and approval for business consolidation, merge and reorganization of China's auto sectors.

All these moves will be conducive to the emergency of bigger and stronger auto enterprises in China so that the auto industry in China will have proper concentration and develop along a healthy track.

Last year China's output of domestically made cars stood at 3.2million, and the output is expected to reach 4.2 million this year. Most of the purchases were made by individual citizens, which is an indication of China's fast-growing economy and the upgraded consumption structure of its consumers.

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