The
latest revised Draft of China’s Catalogue
for Guidance of Foreign Investment was published on December 7, 2016, with a
positive outlook for the automotive electronics and AEV battery industry. This
draft loosens the access restrictions for foreign investments into the Chinese
industry.
Source: Baidu
Furthermore,
this draft, compiled by the National Development and Reform Commission (NDRC)
as well as the Ministry of Commerce of the People’s Republic of China (MOC), is
asking explicit about the public opinion and encourages a discussion about
the further handling. The deadline for comments on this draft is January 6,
2017.
About access
restrictions
The
main change of this new draft is the categorizing of industries for
investments. The previous drafts used to keep the categorization into
encouraged, restricted, and prohibited industries. This is an excluding list,
so all industries, that don’t count to one of the categories, are automatically
permitted.
The
newest draft from December 7 however, indicates a new categorization into
an encouraged and negative list. The negative list itself is again split up into
restrictions on foreign equity holdings, restricted category, and prohibit
category.
Additionally,
the new draft reduces the former 93 restrictive measures in the Catalogue to
now only 62.
The
reasons can be found in the focus on expanding the openness of China’s
industries like modern agriculture, advanced manufacturing, high and new technology,
energy conservation and environmental protection, and modern service industry.
Two
of the industries, that benefit from the loosening of the access restrictions
are the automotive electronics and alternative energy vehicle (AEV) battery
industries. It is important, however, that there are only two battery related
projects, that are part of the encouraged foreign investment. These are battery
separators (15-40μm in width and 40% in pore rate) and battery management
system (BMS).
According
to the research of CCM, the investment encouraging in these fields is the goal
of balance out China’s weak domestic power battery industry. Also, the
political relations to advanced car technology exporters, like the USA and
Japan, can be described as unstable.
Compared
to the encouraged investment industries of the previous draft, some battery
projects have been canceled, namely energy mode power battery (energy
density≥110Wh/kg, cycle life≥2000 times and foreign capital ratio≤50%) and battery
anode materials.
This
absence doesn’t have to mean restriction, according to the secretary general of
China Industrial Association of Power Sources, Liu Yanlong, as the
establishment of Japanese and South Korean factories in China shows. The
companies Samsung SDI CO., Ltd. and LG Chem Ltd. are already producing
automobile power batteries and batteries for battery electric vehicles (BEV).
Panasonic Corporation is the third foreign company to start production expected
in 2017.
About enterprise
catalogue
Even
there are in fact foreign factories operating in China, not one company is
listed in the qualified enterprise catalogue of the Ministry of Industry and
Information Technology of the People’s Republic of China, yet. The catalogue
contains 57 enterprises so far, in December 2016, of which all are a domestic
origin. Liu Yanlong suggests, that this fact is related to the subsidies, that
enterprises benefit from, which are listed in the enterprise catalogue.
About CCM:
CCM
is the leading market intelligence provider for China’s agriculture, chemicals,
food & ingredients and life science markets.
Do
you want to find out more about the energy market in China? Join our
professional online platform today and get
insights in Reports, Newsletter, and Market Data at one place. For more trade
information on batteries visit our experts in trade analysis to get your answers
today.