Is China about to liberalise its trade and FDI rules?

Is China about to liberalise its trade and FDI rules?

China plans to gradually reduce import tariffs on built-up vehicles from the current 25%, according to local reports citing a statement released to the press by the country's Foreign Ministry.

The Ministry's statement is also reported to have confirmed China's plans to launch a pilot programme by June 2018 to relax foreign ownership restrictions on companies involved in making new-energy and special-use vehicles in established free trade zones (Tesla is planning a plant at a free trade zone in Shanghai).

The statement was released to the media during US President Donald Trump's visit to Beijing last week.

Also during a meeting between Chinese President Xi Jinping and Donald Trump, Ford Motor announced plans to increase exports of cars and components worth US10bn annually to China within three years.

Ford Vice-President Peter Fleet and head of Ford Asia-Pacific confirmed the plan, which he described as "robust". Most of the imports will come from the US, with some also originating in Canada and other countries where Ford has a strong manufacturing presence.

Built-up vehicle imports will mostly comprise performance cars such as Mustangs and premium models from Ford's Lincoln division.

Ford said it sold a total of 61,743 imported cars in China in the first 10 months of 2017 – 60% more than in the same period of last year. This is less than 7% of Ford's total vehicle sales in the country.

Last week Ford signed an agreement with local company Zotye Automobile to establish a CNY5bn (US$753m) joint company to produce electric vehicles in China. The 50:50 joint venture, to be called Zotye Ford Automobile, will be Ford's third vehicle production joint venture in the country and will have a production capacity of 100,000 units per year.

Ford also recently announced plans to export the Ford Focus, made by its exiting Changan Ford joint venture, to the USA.