(Effective Date:1994.02.19–Ineffective Date:)
CHAPTER I THE GOAL OF THE POLICY AND KEY DEVELOPMENT PRODUCTS CHAPTER II VERIFICATION AND AUTHORIZATION OF PRODUCTS CHAPTER III STRUCTURE The policy is aiming at building China’s automotive industry (including motorcycle sector) into a pillar industry of the national
CHAPTER I THE GOAL OF THE POLICY AND KEY DEVELOPMENT PRODUCTS Article 1 The State is to guide the automobile enterprises to make good use of both domestic and overseas funds and open up and expand domestic Article 2 The State is to encourage a gathering of investment and an industrial restructuring in the industry so as to avoid the excessive Article 3 Key development products: 1. Auto parts and components: key parts and components of sedans 2. Passenger automobiles (Class M): economic sedans and special chassis for large and middle-sized passenger coaches 3. Trucks (Class N): special motor vehicles and new engines 4. Motorcycles (Class L): engines 5. Equipment: die sets 6. Basic components: casting and forging blank components
CHAPTER II VERIFICATION AND AUTHORIZATION OF PRODUCTS Article 4 The State will effect control on the safety, pollution control and energy saving of automobile products (including motorcycles) according Article 5 The State will adopt the international conventional verification of up to standards on automotive products (including motorcycles) Article 6 The automobile enterprises should apply for verification and authorization in accordance with the requirements of “verification and Article 7 Automobile manufacturers are still responsible for all problems in designing and manufacturing after their products are qualified
CHAPTER III STRUCTURE OF THE INDUSTRY Article 8 The restructure of automotive industry is to promote conglomeration of automobile enterprises, serialization of products and specialization Article 9 The State encourages automobile enterprises to develop inter- department and inter-regional enterprise groups through assets merge, Article 10 The State will select a number of automobile, motorcycle and auto part manufacturing enterprises or enterprise groups which have 1. For an, enterprise which has an annual capacity of producing over 300,000 units of automobiles and selling over 200,000 units and 2. For an enterprise which has an annual capacity of producing over 150,000 automobiles and selling over 100,000 units and spends 3. For an enterprise which has an annual capacity of producing over 100,000 units of automobiles and selling over 800,000 units and 4. For an enterprise which has an annual capacity of producing over 20,000 units of heavy-duty trucks and selling over 15,000 units 5. For an enterprise which has an annual capacity of producing over 1,500 units of large or medium-sized motor coaches or the chassis 6. For an enterprise whose products of key parts or components of sedans accounts for at least 25 percent of the domestic market or . For a motorcycle enterprise whose products account for over 10 percent of the sales volume of the domestic market, the State supports Article 11 The production capacity and the sales volume of an enterprise or enterprise group means the amount of the serial products, which Article 12 For an enterprise which meets the requirements listed in Article 10 of the present policy, it will enjoy the following treatments 1. Zero rate of orientation regulation tax for its investment in fixed assets; 2. Priority for it to issue and list its shares and debentures; 3. Active support in bank loans; 4. Priority for its use of overseas fund in the foreign funds use plan; 5. Policy-based loans will be arranged for projects of economic cars, auto parts and components, die sets and casting and forging 6. The financial company within an enterprise group may expand its business scale after approval of relevant State departments. Article 13 Automobile and engine projects (including Chinese-foreign joint ventures and cooperative firms) newly approved by the State shall 1. The sedan project with engine displacement capacity up to 1600 cc shall have an annual production capacity of 150,000 units at 2. The light-duty truck project shall have an annual production capacity of 100,000 units at least; 3. The light-duty bus project shall have an annual production capacity of 50,000 units at least; 4. The heavy-duty truck project shall have an annual production capacity of 10,000 units at least; 5. The motorcycle project with engine displacement up to 1500h cc shall have an annual production capacity of 150,000 units at least; 6. The auto gasoline engine project with displacement up to 2500 cc shall have an annual production capacity of 150,000 units at least; 7. The auto diesel engine project with displacement up to 3500 cc shall have an annual production capacity of 100,000 units at least.
CHAPTER IV TECHNICAL POLICY OF THE INDUSTRY Article 14 The State encourages and supports automobile enterprises to set up their own product research and development institutes and build Article 15 The State encourages dissemination and use of electronic technology, new technology and new materials in auto production, production Article 16 Construction of the new automobile enterprises must ensure the advanced level of their products; upgrading of the existing products Article 17 The passenger motor coaches and trucks not up to 3.5 tonnes shall use 90 gasoline as the fuel step by step before 2000; the passenger Article 18 The State supports establishment of national research, experiment and testing institutes of automobiles, motorcycles and key components Article 19 The State encourages automobile enterprise to establish Chinese-foreign joint venture or cooperative technological research and development Article 20 The State encourages automobile enterprises to adopt modern electronic technology and flexible processing equipment, on-line automatic
CHAPTER V INVESTMENT AND FINANCITY POLICY Article 21 The State encourages automobile enterprises to pool up development fund through multiple channels. Article 22 The State guides the enterprises or enterprise groups possessing technological and management advantages to coop with localities Article 23 Projects of key automobile products, may raise funds by issuing stocks under approval of the State Council. Article 24 The State will formulate the corresponding policy to encourage inter-regional or inter-department flow of investment and protect Article 25 When conditions permit, non-banking financial institutions for automotive industry may be established under approval of the relevant Article 26 Under approval of the State Council, automobile enterprises may apply for pilot capitalization of the State debts.
CHAPTER VI POLICY FOR USING FOREIGN FUNDS Article 27 The State encourages automobile enterprises to develop China’s automotive industry with foreign funds. Article 28 When using foreign funds, the automobile enterprises shall select the overseas firms with the following conditions as their joint 1. holding their own product patents and trademarks; 2. owning product development technology and manufacturing technology and their product and technological indices complying with the 3. possessing independent international marketing channels (or networks); and 4. maintaining sufficient financing capacity. Article 29 An overseas firm shall not establish more than two joint equity or cooperative ventures in China to assemble a same model of motor Article 30 The State supports automobile enterprises with advanced product technology and manufacturing technology to develop themselves through Article 31 A Chinese-foreign joint equity or cooperative automobile enterprise must meet the following conditions before it can be incorporated: 1. An internal technological research and development institute has been established in the enterprise with capacity to develop new 2. The products therein reach the advanced international level of the 1990; 3. The joint venture established shall have the capacity to balance its own foreign exchange with export of its own products as the 4. When the joint venture wants to buy parts and components, the same parts and components made in China should be given priority. Article 32 In a Sino-foreign joint equity or cooperative venture which makes whole automobiles, motorcycles or engines, the share of the Chinese Article 33 Stop examination and approval of the projects which engaged in renewal or scraping of imported old automobiles or motorcycles in
CHAPTER VII IMPORT CONTROL POLICY Article 34 Whenever China’s automotive industry has not acquired the capacity for international competition, the State adopts necessary control Article 35 In accordance with the development of China’s automotive industry, the tariffs on import of automobiles and motorcycles shall be Article 36 The State has designated Dalian Xingang Port, Tianjin Xingang Port, Shanghai Port and Huangpu Port and Manzhouli and Shenzhen (Huanggang) Article 37 All import automobiles and motorcycles, except those stipulated by the diplomatic and governmental bilateral agreements and Article Article 38 According to the market demand, the amount and variety of automobiles imported each year must be in great conformance with the State
CHAPTER VIII EXPORT CONTROL POLICY Article 39 The State encourages automobile enterprises to expand export and participate in international competition. The automobile enterprises Article 40 The State encourages automobile enterprises, when conditions permit, to set up joint equity or coop venture or solely owned manufacturing 1. An automobile enterprise reaches the following indices in terms of the proportion of export amount of complete automobiles among Passenger automobiles: M1 three percent
Trucks: N1 five percent Motorcycles: L ten percent 2. The export of an automobile (motorcycle) parts and components manufacture reaches 10 percent of its annual sales value.
Article 42 After introduction of a manufacturing technology from overseas, an automobile enterprise must start its effort to localize the products Article 43 An automobile enterprise shall not engage in assembly through import of semi-knock-downs (SKD) or completely knock-downs (CKD). Article 44 The State formulates preferential import tariff rates in accordance with the localization rate of automobile products. Those firms 1. The localization rate reaches 40 percent, 60 percent or 80 percent in the products manufactured with the import technology for 2. The localization rate reaches 50 percent, 70 percent or 90 percent in the products manufactured with the import technology for 3. The localization rate reaches 50 percent, 70 percent or 90 percent in the products manufactured with import technology for unit
CHAPTER X CONSUMPTION AND PRICING POLICY Article 45 The State encourages the use of energy saving and low- pollution automobiles. Article 46 It is necessary to change gradually the consumption pattern of the administrative departments, organizations, institutions and State-owned Article 47 The State encourages individuals to purchase automobiles and will formulate specific policies in accordance with the development Article 48 Neither locality nor department shall interfere, with administration and economic means, in individuals, purchase and use of automobiles Article 49 The automobile enterprises shall determine the price of their civil automobiles independently in accordance with the market demand. Article 50 The automobile enterprises are encouraged to establish their own marketing systems and after-sale service systems in accordance with
CHAPTER XI RELEVANT INDUSTRIAL AND SOCIAL SECURITY POLICY Article 51 In accordance with the demand of the 2000 development program of the automotive industry, the metallurgical, petrochemical, machine- Article 52 Railways, transport, posts and telecommunications, power and environment protection departments shall adopt effective measures to Article 53 Provision of sufficient parking lots must be considered in plans for construction and redevelopment of residential quarters, commercial Article 54 It is necessary to plan the layout of filling stations and build them gradually in accordance with the local growth trend of automobiles; Article 55 From 1995 school year, primary schools shall list education in traffic knowledge in their teaching programs and enhance the traffic
CHAPTER XII INDUSTRIAL POLICIES, PROGRAM AND PROJECT MANAGEMENT Article 56 The State guides development of the automotive industry through the automotive industry policy and program. All the localities and Article 57 The automotive industry policy and development program are formulated and revised by the State Planning Commission, the State Economic Article 58 The firms undertaking construction, expansion, renovation of, and Sino foreign joint equity or cooperative ventures and import technology Article 59 The auto part projects complying with the State industrial policies and program, when they can ascertain sales market and construction Article 60 The automotive industry management department, following the requirements of the present policy shall cooperate with relevant departments Article 61 The context of the present policy shall come into effect on the day of its promulgation and the right of its interpretation resides Notes: 1. According to the State motor vehicle classification standards [QC/T59-93] promulgated by the State Bureau of Technological 2. “Localization” here means the making of products within the People’s Republic of China.
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