The government seems to have abandoned the idea of ​​protecting the national auto industry. In the latest series of Sino-US trade agreements, China has made significant concessions in the automotive industry.
On November 12, Wagoner, chairman and CEO of American General Motors, the world’s largest automaker, announced in Detroit that in the next two years, General Motors will export 4,500 vehicles to China, including Cadillac cars and luxury multi-function vehicles. And luxury sports car.
The import agreement included in the Chinese government purchase order was signed in Detroit by domestic companies such as General Motors Overseas Sales Corporation and General Motors China Corporation, as well as China National Automobile Import and Export Corporation and China Automotive Trade Center. This is the first time that the foreign branch of the foreign automobile company has been allowed to sign a vehicle import agreement. This agreement has a landmark significance for the Chinese auto industry.
In the country’s commitment to WTO, the quota for imported cars will be formally cancelled in 2005. At present there are more than one year from this deadline. The big gift package received by General Motors indicates that the Chinese government fulfilled its commitment to allowing foreign companies in China to directly engage in automobile import trade and domestic distribution business one year in advance.
There are two other agreements signed at the same time. The first $400 million agreement to supply or assemble components to Cadillac and other 13,000 vehicles that have not yet announced the brand. The second agreement was to supply approximately $700 million kits to the Buick Regal Sedan and the Buick GL8 official business wagon. The two cars will continue to be assembled in Shanghai.
Thanks to the acquisition of vehicle sales rights, GM excitedly announced its new Chinese strategy. The company plans to establish an exclusive network in major cities in China and will begin selling Cadillac cars and providing related services from next year.
At the same time, China also signed agreements with Ford and Chrysler respectively. Among them, Ford has 200 million U.S. dollars and Chrysler 300 million U.S. dollars. Li Anding, a well-known domestic automotive reporter, told Business Week that comparing the investment and sales of the three companies in China, it can be clearly seen that the amount of orders is directly proportional to the market share of three US companies in China.
Although the three major auto companies in the United States are happy, but for the Chinese auto industry, which has been committed to the protection of the national automobile industry and the increase in the localization rate of joint venture plants, this concession appears quite helpless.
The purchase agreement with a total value of US$1.8 billion signed in Detroit is part of a multi-billion-dollar trade agreement reached by the Chinese trade delegation in the United States. These agreements are to reduce the trade surplus with the United States in order to quell the U.S. complaints against China.
“The United States wants to use the appreciation of the renminbi to ease the surplus pressure, but the problem is that we really do not have the strength to appreciate the renminbi, and exchange rate stability is crucial to the development of the country,†said Han Lihua, professor at the China University of International Business and Economics, in contrast to the Concessions were made on the issue. "It is not too much sacrifice to allow imported cars to enter China in advance."
Considering the actual situation in China and the United States, China's procurement does not have much choice. Zhao Ying, director of the Industrial Development Office of the Institute of Industrial Economics at the Chinese Academy of Social Sciences, believes that for high-tech products, such as aerospace products, Americans need technical protection, while China, a low-end product, does not need it. Therefore, of course, the car is the first choice. More importantly, autos and aircraft manufacturers are major US companies that have a significant impact on American congressmen. In fact, cars have been an important part of many large-scale purchases to the United States since the 1990s.
However, Zhao Ying believes that it cannot rely on a policy purchase agreement and believes that GM has obtained the import right. Moreover, this sudden big order does require new sales channels. Li Anding believes that for GM, this list needs a way out, so it will allow it to import some vehicles.
The impact of imported vehicles has always been the most worrying issue for the domestic auto industry. Some experts believe that this impact will be even greater than the accession to the WTO two years ago, especially for some national auto brands. A domestic-funded car company told reporters that the various development plans of the company will take into consideration the opening up in 2005. Especially in terms of costs and product pricing, the top executive told reporters that the early release of the market will certainly cause interference.
Cadillac sales in the United States will reach 200,000 this year. At a press conference in Beijing on November 5, Murphy, chairman of General Motors China, joked with Wagner that he hopes to sell 200,000 cars in China next year. Although this is a joke, it also reflects the general view.
Other experts believe that the opening of this purchase must not be overlooked. Cars have always played an important role in policy procurement, but making policy concessions was the first time ever. They regard this concession as a signal: In the current five-year period of protection will be exhausted, while the "impetitive" Chinese national automobile industry is hard to see improvement, the government seems to have abandoned the idea of ​​protection.
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