The Chinese government plans to scrap the 50% limit on foreign ownership of commercial vehicle manufacturing companies in the country next month, according to local reports.

The National Development and Reform Commission and the Ministry of Commerce last week released their joint latest "negative" list of sectors not open to foreign investment which did not include commercial vehicle manufacturers. 

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The current 50% ownership cap on the commercial vehicle sector has been in place since 1994 and its removal is seen as the second phase of a three stage policy announced in April 2018 to gradually remove limits on foreign investment in the automotive manufacturing sector. 

The foreign ownership limit on manufacturers of new energy vehicles, including plug-in hybrid and electric vehicles, was removed in the second half of 2018.

Tesla was the first foreign vehicle manufacturer to benefit from these changes, with its electric vehicle plant in Shanghai the first in the country to be foreign owned when it opened late in 2019.

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Volkswagen last month said it planned to increase its stake in its JAC Volkswagen new energy vehicle joint venture from 50% to 75% this year in a deal understood to be worth EUR1bn.

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Restrictions on foreign ownership of makers of passenger vehicles powered by internal combustion engines are scheduled to be removed in 2022.

BMW late in 2018 agreed with its Chinese partner Brilliance Auto to raise its stake from 50% to 75% in its passenger vehicle joint venture BMW Brilliance as soon as restrictions are lifted.

The commission said opening up the automotive sector to full foreign competition will help "invigorate" the domestic market by forcing local companies to innovate and become stronger internationally.