China Will Begin Lifting Foreign Ownership Cap in July

June 28, 2018 at 2:18 PM

China says it will begin eliminating its 50% cap on foreign ownership of carmaking operations on July 28, Reuters reports.

The restriction was enacted in 1994 to help domestic manufacturers gain expertise and prepare them to compete in the global auto industry. In April, China’s central government signaled its willingness to eliminate rules on foreign ownership across a broad array of industries.

Beijing said earlier it would remove restrictions this year on makers of electric and plug-in hybrid cars and do the same for commercial vehicles in 2020 and passenger cars in 2022. Major carmakers have indicated they don’t plan to make any significant changes to their well-established joint ventures in China.

The government says it also will begin to ease or eliminate ownership caps in such areas as power grids, shipbuilding and aircraft manufacturing.