China's WTO Compliance and Foreign Investment in the Auto Industry
January 31, 2003 | BY
clpstaff &clp articlesChina's automotive industry is seen as one of the big growth areas in the post-WTO era. We're pleased this month to have a comprehensive survey of the main issues in the trade agreements regulating foreign investment and the current state of investment in China's car industry.
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In China's WTO accession key WTO members, including the EU, Japan and the US, fulfilled their goal of making China commit to granting substantial market access to their automotive industries. While supporting their governments to push China to make good on these commitments through the Transitional Review Mechanism on WTO compliance in Geneva and other bilateral channels, multinational automakers are also helping to paint an attractive though incomplete picture in China through their strategic investments in auto manufacturing, auto parts, auto finance and auto-related services.
Liberalization of foreign investment after WTO accession will reinforce positive economic reform trends occurring within China, including deregulation and further opening of the automotive industry.1 On the flip side, lowering tariff and non-tariff barriers brought by WTO entry has also exposed the relatively weak Chinese automobile sector to the oligopolistic global auto market.