CCM: China eases access to automotive electronics and AEV battery industries

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Publish time: 20th December, 2016      Source: CCM
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   The latest revised Draft of China's Catalogue for Guidance of Foreign Investment was published on December 7, 2016, with a positive outlook for the automotive electronics and AEV battery industry. This draft loosens the access restrictions for foreign investments into the Chinese industry.

  

   

  Source: Baidu

  

  Furthermore, this draft, compiled by the National Development and Reform Commission (NDRC) as well as the Ministry of Commerce of the People's Republic of China (MOC), is asking explicit about the public opinion and encourages a discussion about the further handling. The deadline for comments on this draft is January 6, 2017.

  

  About access restrictions

  

  The main change of this new draft is the categorizing of industries for investments. The previous drafts used to keep the categorization into encouraged, restricted, and prohibited industries. This is an excluding list, so all industries, that don't count to one of the categories, are automatically permitted.

  

  The newest draft from December 7 however, indicates a new categorization into an encouraged and negative list. The negative list itself is again split up into restrictions on foreign equity holdings, restricted category, and prohibit category.

  

  Additionally, the new draft reduces the former 93 restrictive measures in the Catalogue to now only 62.

  

  The reasons can be found in the focus on expanding the openness of China's industries like modern agriculture, advanced manufacturing, high and new technology, energy conservation and environmental protection, and modern service industry.

  

  Two of the industries, that benefit from the loosening of the access restrictions are the automotive electronics and alternative energy vehicle (AEV) battery industries. It is important, however, that there are only two battery related projects, that are part of the encouraged foreign investment. These are battery separators (15-40μm in width and 40% in pore rate) and battery management system (BMS).

  

  According to the research of CCM, the investment encouraging in these fields is the goal of balance out China's weak domestic power battery industry. Also, the political relations to advanced car technology exporters, like the USA and Japan, can be described as unstable.

  

   

  

  Compared to the encouraged investment industries of the previous draft, some battery projects have been canceled, namely energy mode power battery (energy density≥110Wh/kg, cycle life≥2000 times and foreign capital ratio≤50%) and battery anode materials.

  

  This absence doesn't have to mean restriction, according to the secretary general of China Industrial Association of Power Sources, Liu Yanlong, as the establishment of Japanese and South Korean factories in China shows. The companies Samsung SDI CO., Ltd. and LG Chem Ltd. are already producing automobile power batteries and batteries for battery electric vehicles (BEV). Panasonic Corporation is the third foreign company to start production expected in 2017.

  

  About enterprise catalogue

  

  Even there are in fact foreign factories operating in China, not one company is listed in the qualified enterprise catalogue of the Ministry of Industry and Information Technology of the People's Republic of China, yet. The catalogue contains 57 enterprises so far, in December 2016, of which all are a domestic origin. Liu Yanlong suggests, that this fact is related to the subsidies, that enterprises benefit from, which are listed in the enterprise catalogue.

  

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