Long Yongtu, secretary general of the Asia Forum and chief representative of China for the negotiations on the WTO, said that today is the first time I participated in the Automotive Forum since China's accession to the WTO. It can be said with emotion. Why is it filled with emotion? Because the issue concerning automobiles has always been one of the difficulties in China’s WTO accession negotiations, and it can be said to be one of the most difficult difficulties. First, we have a high degree of protection for the automobile industry in China. This is reflected in the fact that when we began to enter negotiations on the automobile industry, the tariffs on Chinese cars were as high as 180% to 220%. At that time, the global high-tariff industry was a typical example. Case. At the time, the strictest quota system was imposed on the import of Chinese cars, which made China face extremely serious difficulties in joining the WTO's tariff negotiations and non-tariff negotiations. Second, there were many restrictions on foreign investment in the Chinese automotive industry at the time, and many did not comply with the rules of the World Trade Organization. For example, at the time, many requirements were put forward for foreign investment in China's automobile industry. The requirement for local content was also the so-called "localization rate" requirement; it put forward the requirements for foreign exchange balance and put forward the requirements for export. How many proportions of exports must be exported in China, and how many proportions of exports will be given corresponding tax benefits, which are against the rules of the World Trade Organization. At that time, there were strict restrictions on the type of vehicles produced. Third, at the time of the highly centralized examination and approval of investment vehicles, the approval of the auto industry at the provincial level was only 30 million. Later, it was increased to 120 million after negotiations. At that time, the second difficulty was the restrictions on foreign investment in Chinese companies. The third difficulty is that banks and non-banking institutions provide credit issues for car consumers. The high degree of protection for the automobile industry actually protects the German public. After China joined the World Trade Organization, China’s automobile industry has seen unprecedented development prospects. Due to our long-term protection of the automobile industry, the price of Chinese cars is in a distorted price system that completely violates the laws of the market. In the first year after China joined the World Trade Organization, due to the expected drop in the price of imported vehicles, domestic cars have taken the lead in lowering prices, triggering a chain reaction in the national auto market to lower prices. If the long-term distortion of car prices is not corrected, it will not be possible to develop the Chinese healthy automobile industry. After China's accession to the WTO, some major auto companies in the world have increased their capital and expanded shares, and some have begun to enter China, creating the situation where the world’s largest foreign companies “contribute to hegemonyâ€. In the past, the high degree of protection for the Chinese automobile industry was only a protection for foreign manufacturers from entering foreign industries in China. Specifically, at the time, we actually protected the public, making the German public long-term use of Santana to occupy the Chinese market for a long time. Only by attracting major auto suppliers from all over the world to enter China will foreign auto companies bring their most advanced technologies and latest models to China, thus enabling Chinese autos to attract new foreign investment. China's auto industry has broad prospects. The prospects for the Chinese auto industry are in full concern. I completely agree with Comrade Chen Qingtai's judgment that China's auto industry has broad prospects. My judgment is mainly based on the two major trends in the current development of the Chinese economy. I think there are two major trends in China's economic development, that is, two major shifts. One is the transfer of rural population to urban areas, and more than 60% of the population is still in rural areas. The population of rural areas in developed countries is already 10%, and some of them reach 2% and 3%. As China becomes a truly economic power, it will inevitably have to take the process of transferring rural populations to urban areas. It can be said that the fundamental way to solve the problem of rural peasants in China is to transfer the rural population out. In the process of such a major shift, it will inevitably drive the entire process of urbanization, and it will inevitably lead to changes in the lifestyle of the entire urban residents. Because the increase of urban population will inevitably make the urban population transfer to the suburbs, this gives us an unprecedented market opportunity for the entire automotive industry. This means that China’s car ownership, especially car ownership, will have great development in the future. Development is due to the fact that China has emerged from the transition from rural to urban population. The second opportunity is the second major transfer, the transfer of global industries to China. The major shift in manufacturing has become an irresistible trend. Due to the shift of world industries to China, the transfer of the automobile industry, especially automobile parts, has become a major trend in such a large transfer process. Our China's auto industry should make good use of the shift of the rural population of China to cities. China's rural areas will see China's huge market during its urbanization. From the industrial transfer, we see that our domestic autos have good prospects in terms of technology leadership in manufacturing. Source: Wealth Times
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