Policy on Developing the Automotive Industry
Policy on Developing the Automotive Industry
Policy on Developing the Automotive Industry
Order of the National Development and Reform Commission [2004] No. 8
May 21, 2004
The Policy on Developing the Automotive Industry, which was debated and adopted at the executive meeting of the National Development and Reform Commission, and reported to and approved by the State Council, is hereby promulgated, and shall take effect on the date of promulgation. The Formal Policy on the Development of the Automotive Industry, promulgated in 1994, shall be terminated this very day, in accordance with the official reply of Letter No. 30 [2004] of the State Council.
Director: Ma Kai
Attachment: Policy on Developing the Automotive Industry
To meet the requirements for continuously improving the socialist market economy system and to suit the new situation for the development of the automotive industry, at home and abroad, after entry into the World Trade Organization, to promote the structural adjustment and upgrade of the automotive industry, improve the overall international competitiveness of the automotive industry, and satisfy the increasing demand of consumers for auto products, in addition to promoting the healthy development of the automotive industry, we hereby formulate the policy on automotive industry development. The aim is to develop the automotive industry of our country into a supporting industry of the national economy before 2010, and to make greater contributions to realizing the goal of building an all-round, well-off society.
Chapter I Aim of the Policy
Article 1 The principle of combining the fundamental role of market allocation of resources with macro control of the government shall be adhered to, in an effort to create a market environment of fair competition and unification, and to improve the administrative system of rule of law within the automotive industry. Functional departments of governments shall, in accordance with the mandatory requirements of the administrative laws and regulations and technical specifications, administer enterprises that produce automobiles, farm-transportation vehicles (low-speed cargo trucks and tricars, the same hereinafter), motorcycles and components and parts, and the products thereof, and regulate the market acts of various economic bodies within the automotive industry.
Article 2 The harmonious development of the automotive industry and affiliated industries, urban transportation infrastructure and environmental protection shall be accelerated. A better environment shall be created for the use of automobiles, and a healthy consumer market shall be fostered to protect the rights and interests of consumers, and to promote private consumption of automobiles. By 2010, our country will become one of the major auto-manufacturing countries in the world, with auto products satisfying the major demand of the domestic market and entering into the international market, in batches.
Article 3 Auto-production enterprises shall be encouraged to improve the research and development ability and the technological-innovation ability, positively develop products with self-owned intellectual property rights, and pursue the strategy of famous-brand operation. In 2010, auto-production enterprises shall form some famous-brand products of automobiles, motorcycles and components and parts.
Article 4 The structural adjustment and reorganization of the auto industry shall be promoted to expand the large-scale benefits of enterprises, improve the centralization of the industry and avoid scattered, disorderly and low-level, repeated construction.
Several large automobile enterprise groups, which are internationally competitive, shall be formed through market competition, and every effort shall be made to ensure they are ranked among the world's top 500 enterprises by 2010.
Automobile producers shall be encouraged to form cartels, in accordance with market rules, to realize the complementary advantages and sharing of resources, and to expand business scale.
Components and parts enterprises, which have comparative advantages, shall be fostered to realize mass production and to enter the international system of procurement, to take an active part in international competition.
Chapter II Development Plan
Article 5 The state shall guide the compilation of the industry development plan, in accordance with the policy of automotive industry development. The development plan shall include the mid- and long-term development plans, and the large auto enterprise group development plan. The mid- and long-term development plans shall be formulated by the National Development and Reform Commission, with relevant departments, on the basis of solicited opinions, and shall be implemented after being reported to and approved by the State Council. The large automobile enterprise groups shall compile the development plans for their own groups, on the basis of the mid- and long-term development plans of the industry.
Article 6 If any automobile enterprise group has characteristics, such as self-developed products under unified planning, independent trademarks and famous-brand products, and all-in-one administration on the system of sales and services, and if the domestic market share of the automobile products produced by its kernel enterprises and the subordinated, wholly owned subsidiary enterprises, shareholding enterprises and Sino-foreign joint venture enterprises exceed 15%, or if the annual income from the sales of whole automobiles account for more than 15% of the sales income of the whole automobiles of the automotive industry, it may compile and report the group development plan separately as a large automobile enterprise group. The plan shall be implemented after it has been demonstrated and approved by the National Development and Reform Commission.
Chapter III Technical Policy
Article 7 The principle of combining the introduction of technology with self development shall be adhered to. International advanced technology shall be followed up and studied. International cooperation shall be conducted to develop the advanced and applicable technology with self-owned intellectual property rights. Products with the introduced technology should be internationally competitive, and shall meet the demands of the development of mandatory requirements for international automobile technical specifications. Efforts shall be made to gear self-developed products to the international technical level, and to participate in international competition. The state shall support, with tax policies, research and development activities that conform to the technical policy.
Article 8 The state shall guide and encourage the development of small gasoline-engine-emission automobiles that conserve energy and protect the environment. The automotive industry -- in combination with the requirements of the strategy of state energy source structural adjustment and emission standards -- conduct research and industrialize new types of power, such as electric cars, batteries used to power vehicles, and focus on the development of hybrid vehicle technology and diesel motor technology. The state shall take measures in scientific and technological research, technological transformation, industrialization of new technologies, and policies and the environment, to promote the production and use of the hybrid vehicles.
Article 9 The state supports the research and development of alcohol fuels, natural gas, hybrid fuels, hydrogen fuels and other new types of vehicle fuels, and encourages automobile producers to develop and produce automobiles that use new types of fuels.
Article 10 The automotive industry, and relevant industries, shall emphasize the development and application of new technologies to improve fuel economy. Before 2010, the average oil consumption of new passenger cars shall be reduced by more than 15%, compared with 2003. A public-notice system regarding the oil consumption of auto products shall be established, in accordance with the mandatory requirements of technical specifications.
Article 11 Research shall be conducted into light materials, reclaimable materials, environmental protection materials and other new materials for vehicle use. The state shall formulate, in a timely manner, the requirements on the minimum rate of use of reclaimable materials.
Article 12 The state supports the research, development and production of electronic auto products, develops the electronic auto industry, and enhances the application of electronic information technology in auto products, sales and logistics and production enterprises to promote the development of the automotive industry.
Chapter IV Structural Adjustment
Article 13 The state encourages the group development of auto enterprises to form a new situation of competition. The optimization and upgrading of the auto industry's structure shall be realized through strategic reorganization among enterprises, on the basis of combining market competition with macro control.
The aim of the strategic reorganization is to support auto producers in their efforts to transform themselves into large automobile enterprise groups, through asset reorganization, and to encourage the formation of cartels through various forms of cooperation, such as sharing of resources, to form the industry structure of harmonious development of large automobile enterprise groups, enterprise consortiums and special automobile-production enterprises.
Article 14 All automobile producers shall improve their level of production specialization during the structural adjustment, and adjust the internal entities that produce matching parts, so they can transform themselves into independent, specialized enterprises that produce components and parts.
Article 15 The enterprise consortiums shall cooperate in fields such as product research and development, and they shall support and collaborate in production and sales and services, which shall embody the structural adjustment of products, the optimization of resource allocation, and the reduction of business costs, and they shall realize large-scale benefits and intensive development. Enterprises that participate in a certain enterprise consortium shall no longer form cartels with other enterprises to consolidate the stability and market status of the enterprise consortium. The state encourages enterprise consortiums to form economic entities, linked by assets, as soon as possible. The relevant provisions of the present Policy shall be followed by newly established automobile producers and automobile production projects of different types involved in the cooperation and development programs of enterprise consortiums.
Article 16 The state encourages enterprises that produce automobiles or motorcycles to participate in international cooperation, bring into play the comparative advantages, and participate in the international division of industries. The state also supports large automobile enterprise groups and overseas automobile groups to merge and reorganize automobile production enterprises, at home and abroad, to expand the business scope and to grasp the trend of globalization of auto production.
Article 17 The exit mechanism of enterprises that produce complete automobiles and motorcycles shall be established, to make special public notices regarding automobile-production enterprises (including existing enterprises undertaking the production of reassembled automobiles) that cannot sustain ordinary production and business operations.
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