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China Looks to Boost Development of New-Energy Vehicle Sector

In line with a December 2018 announcement by the National Development and Reform Commission (NDRC), all future automotive investment projects will fall under the auspices of the relevant local authorities. Furthermore, any investment in certain petrol and diesel car projects is now banned, while production increases are to be restricted. At the same time, the new-energy vehicle sector is to be bolstered via a series of incentives and supportive measures.

These changes were outlined in the recently-published Regulations for the Management of Investment in the Automotive Industry, which came into effect as of 10 January this year. Clearly setting out the focus for the future development of the automotive industry, the regulations include a series of measures designed to accelerate new-energy, smart, and energy-saving vehicle R&D and industrialisation, along with the production of the required parts and components, battery recycling technology and auto parts remanufacturing technology.

They also specify that certain petrol and diesel car investment projects are now prohibited, including any moves to establish new petrol and diesel vehicle enterprises (with the exception of investment projects where the products are not intended for sale within Chinese territory). Restrictions have also been imposed on any proposed increase in production capacity.

The Regulations also cancel the long-applying approval procedure for automotive investment projects. Henceforth, all automotive sector investment projects are to be managed by the relevant local authority via record-filing procedures. Additionally, where specific provisions are set out in the Special Administrative Measures for the Access of Foreign Investment (Negative List), such specific provisions shall be deemed to take precedence.

For further details (in Chinese), please access the following links:

NDRC Decree No.22 (10 December 2018)

A representative of NDRC answering reporters’ questions on the Regulations for the Management of Investment in the Automotive Industry

Content provided by Picture: HKTDC Research
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