Car JV rules revised

The National Development and Reform Commission announced that foreign investors will be allowed to hold majority stakes in automobile joint ventures if the ventures are based in mainland export processing zones and produce for sale to overseas markets. Overseas investors will also be allowed to establish more than two joint venture factories to produce similar automobiles if they merge with mainland companies to do so. Additionally, if a China-listed vehicle producer sells its corporate shares, a Chinese company must be the largest shareholder of the firm. Analysts said that the new policies will encourage auto industry mergers and will discourage domestic non-auto investors from entering the industry.