Beijing to eliminate foreign ownership limits for car, jet makers


For a long period of time China exercised draconian regulations on some branches of manufacturing. It was especially painful for car makers and jet liner producers as Chinese laws demanded partial ownership of the company in exchange of permission to operate on the wast local market. In a surprise move, especially while keeping in mind the current USA/PRC tensions, Communist Party of China deescalated the long disputed issues. It’s promised that the limits will be eliminated as soon as in 2018. What is it? Is it a sign of a weakness, reason for talks, a step to lower tensions or the clever move unassociated with the looming trade war?

We will try to guess based on the selection of priorities. It is electric cars, jetliners, helicopters and drones producers that will be exempted from limits as soon as in 2018. Despite China is rapidly developing its own scientific and engineering workforce there exists some lag in development. It is observed exactly it the listed products. In short term China will get a capital inflow unobstructed by the imposed tariffs. In long term China will stole and replicate – without doubts – all the imported technologies.

It seems that what can be viewed as ‘weakness’ is actually quite the opposite: the long term strategy to claim the leadership in strategical branches of appropriate industries.

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