Auto Industry's WTO Commitments

Under the commitments of China's accession to the World Trade Organization, as it is outlined in the protocol and annexes, as well as in the Working Paper Report, China will gradually liberalize the domestic automotive market with respect to such fields as tariffs, non-tariffs, investments and trade in services.

1. Tariff and non-tariff measures

(1) On 1 July, 2006, the auto import duty will be reduced to 25 percent on average and auto-parts tariffs will fall to 10 percent on average.
(2) The initial quota value of imported automobiles in 2002 was US$6000 million. Currently the quota growth rate is 15 percent per year. On January 1, 2005, all import licenses and quotas will be eliminated.

2. Investment measures

(1) The elimination and cessation of enforcing trade and foreign-exchange balancing requirements, local content requirements and export performance requirements, offsets and technology transfer requirements made effective through laws, regulations and other measures.
(2) Amendments to ensure the lifting of all measures applicable to motor vehicle producers restricting the categories, types or models of vehicles permitted for production (to be completely removed two years after accession).
(3) Raising the limit within which investments in motor vehicle manufacturing could be approved at the provincial government level from the current US$30 million to US$60 million one year after accession; US$90 million two years after accession and US$150 million four years after accession.
(4) With respect to the manufacture of motor-vehicle engines, removing the 50-percent foreign equity limit for joint ventures upon accession.

3. Trade in services related to automobiles

Foreign investment will be permitted to enter the following fields: internal sale of automobiles and parts, import and export of automobiles and distribution services, transport companies for operation, installments on automobiles, leasing and financing motor vehicles for production.

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