WTO:vital milestone for China auto industry

When China was formally approved to join WTO in 2001, Chinese people really feel encouraged, but at the time they are still rather worried about China's auto industry. As a matter of fact, before the accession to the WTO China’s auto industry had attracted great concern from Chinese.

However, practice shows that becoming a member of WTO doesn't hit China's auto industry heavily. Instead, the WTO membership is providing China's auto industry to make dramatically progress in the future and it has become an important milestone for the development of China's auto industry.

After the accession to the WTO, China has been providing trade partners with unprecedented opportunities for access. Transparent rules can also help foreign auto giants determine to invest and build factories in China.

Nowadays China's auto market has become an epitome where auto enterprises compete for market share of the global automobile market.

Among the current mainstream joint auto ventures, except for north and south Volkswagen, Shanghai GM and Changan Ford, others are almost found after China joined WTO. Foreign auto brands also get the opportunity to enter China's auto market.

2002, FAW reconstructed the Tianjin FAW cars and then Toyota upgraded the FAW as its Chinese partner. 2004,a joint venture between Toyota and Guangzhou Automobile Group was found, that time Toyota formally two joint ventures located in south and north. Additionally Toyota has built 4 production bases in Changchun, Tianjin, Chengdu and Guangzhou. October, 2002, Beijing Hyundai was formally established, the first joint venture since China's accession to the WTO. After that, Korean carmakers become an important parts of China's auto market.

2003,Nissan Motor and Dongfeng Group jointly established the Dongfeng Automobile Co., the largest auto joint venture in China with total assets reached 17 billion RMB. The founding of BMW Brilliance is remarkable, not only for auto industry, but has a symbolic significance on China's economy. BMW shows that it has confidence in China's economy.

A few years since China joined the WTO global auto giants except for Renault almost have established a joint venture in China. China and the global auto market are becoming much closer and then develop as an important part of the global automotive market.

From the edge into the mainstream

After the accession to the WTO, with an increasing number of auto giants to join China's automobile industry, China's auto market began to develop rapidly and the role China plays in the world auto market is becoming more important than before. Especially in the last year under the damage of the global financial crisis, Chinese economy still keep steady growth ,making itself become the engine of global car market growth..

WTO membership will bring a more open China's auto market, automotive production and sales, prices and investment also begin to become market-oriented, not only speed up the inflow of more foreign capital into China's auto market, but also a large number of Chinese private capitals have also invested in the automotive industry and the development of the China’s auto industry has more powerful support. From 2001 to 2005's "Tenth Five-Year" period, fixed assets investment of China's auto industry has reached 235 billion RMB, equivalent to the total amount of the former 20 years.

After 2002, Chinese government has issued a series of policies to encourage cars to enter every Chinese family .Stimulated by "sedan into the family" and "WTO membership," China's auto market began growing rapidly for consecutive several years. The growth speed of its auto industry has far exceeded the most optimistic forecast before. Relevant experts initially predicted China's auto output would reach 8 million by 2010. This goal has been achieved in 2007, three years ahead of schedule.

In the first year of accession to the WTO (2001), China sold 2.44 million vehicles, accounting for only 4.3% of the world's total vehicle sales. Then the market share China has in the global car market increases by more than 1% every year .In 2006 the proportion firstly exceeded 10% and last year this figure increased by 16% . In short seven years, the proportion of China's auto sales in the world has increased three times.

China's auto sales ranked seventh in the world with 2.44 million sales in 2001.In 2003, its auto sales broke 4 million, surpassing Germany to enter the world top three. China's car sales in 2006 reached 7.2 million, surpassing Japan as the world's second largest auto consumer.

This year, although the global automotive industry are still struggling to recover , China's auto market can still grow at the speed of nearly 30% and car sales reached more than 8 million in the first 8 months of 2009 ,successfully replaced the United States as the world's largest market.

Considering Japan and other mature markets such as Europe and America are already in saturated conditions, the huge potential of China are attracting great attention of the global auto giants .There is no exaggeration to say that China’s auto market leader will be able to seize the initiative in future competition. Impacted by that , Volkswagen, GM and other auto giants have recently announced new strategic plans aiming at broaden their market share in China, while Toyota are also discussing its own new strategies. Future-oriented competition begins again in China. (Translator: Qinghua Wade)

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