From：Internet Info Agency 2019-03-14 16:17:09
The Second Session of the 13th National People’s Congress (NPC) is undergoing the deliberation and approval of China’s draft foreign investment law.
After the law being approved and implemented, the Chinese market will open wider to the outside world and will further relax restrictions on market access. Foreign investors’ legitimate rights and interests will be protected so as to create a fair and impartial market environment where Chinese and foreign companies are treated as equals and engage in fair competition.
Some analysts believe that after the implementation of the law, restrictions on foreign investment in the auto sector will be gradually phased out, and market access for foreign capital will be greatly relaxed. These measures will pose serious challenges on Chinese car brands.
Changan Automobile, the leader Chinese car brands, believes that after decades of rapid development, Chinese car brands have the strength to compete with foreign brands. Changan Automobile has the ability to meet the challenges and develop itself in fair competition.
The law will advance a new round of high-level of opening up
On the afternoon of March 8, at the second plenary meeting of the 2nd session of the 13th National People's Congress, Li Zhanshu, chairman of the NPC Standing Committee, pointed out that the draft foreign investment law fully reflects the new concept, new ideas and new ways of China's reform and opening up, which will play an important role in advancing a new round of high-level opening up in the new era.
Wang Chen, vice chairman of the NPC Standing Committee, stated in the explanation of China’s draft foreign investment law that the formulation of the law is an objective requirement for promoting the healthy development of the socialist market economy and achieving high-quality economic development. In the past 40 years, the achievements of China's economic development were obtained under the circumstance of opening up. And China's high-quality economic development also must be achieved under more open conditions. Facing the future, in order to achieve high-quality development, China must seize and make good use of opportunities to open wider to advance reform, make innovation, and promote development.
The attraction of foreign direct investment are important elements of China's reform and opening up. Since 1979, especially after China's entry into the WTO at the end of 2001, China's automobile industry has achieved fruitful results in its use of foreign capital and has continued to grow and develop in an open environment. China has become the world's largest automobile producer and the largest new car market for ten consecutive years.
Before China's entry into the WTO, many people worried that foreign cars would flood into China after the auto market is released. This would be a disaster for the Chinese auto industry. However, it turns out that opening up not only promotes the sustained and rapid development of China's auto industry, but also releases huge market potential.
In April last year, the National Development and Reform Commission stated that the automobile industry will go through a transitional period of opening up. In 2018, the ratio of foreign-funded shares of special vehicles and new energy vehicles will be lifted. In 2020, the restrictions on foreign-funded shares of commercial vehicles will be abolished. In 2022, the restrictions on foreign-funded passenger vehicles and the limit of no more than two companies in a joint venture will be cancelled. Through the five-year transition period, the auto industry will all lift restrictions on foreign investment.
After the law being enforced, China will further relax the market access to foreign investors and lift the limit of the share ratio in the auto sector. This is a major measure to further expand the opening up under the new situation. It will not only impact the Chinese auto industry, but will also promote Chinese auto companies to fairly compete with foreign car brands in the open market, and to develop better and faster.
Changan Automobile has the ability to compete with foreign brands
Facing new challenges, Zhu Huarong, deputy to the 13th National People's Congress and president of Changan Automobile, who is attending this year's "two sessions", believes that, as an important pillar industry of the national economy, China's automobile industry has grown to the number one in the world after years of development. Chinese auto companies have also developed a comprehensive capability of system, quality and service to meet the challenges.
Mr. Zhu pointed out that Changan Automobile has been insisting on independent innovation and independent research and development for many years. It has fully competed with foreign capital in terms of R&D strength, manufacturing capability, market foundation and innovation capability. In the field of smart interconnectivity and new energy vehicles, some technologies of Changan Automobile have already led the domestic and foreign counterparts.
Compared with multinational auto giants, the biggest shortcoming of Chinese auto companies is R&D. Over the past decade, Changan Automobile has adhered to independent research and development and continued to build world-class R&D centers in Chongqing, Beijing, Hebei, Hefei, China, Turin, Italy, Yokohama, Japan, Birmingham, United Kingdom, Detroit and Silicon Valley, USA. The “Five Nations and Nine Lands” centers are a focus on global collaborative research and development.
Changan Automobile invests 5% of its sales revenue every year in research and development, a total of 49.6 billion yuan during the 11th Five-Year Plan period (2006-2010). It has 194 international advanced laboratories in 16 fields including vibration and noise, collision safety, braking performance, chassis test and drive system, such as State Key Laboratory of Vehicle NVH and Safety Technology and National Joint Engineering of Hybrid Passenger Vehicles Laboratory, And Changan has invested about 2 billion yuan to build an international standard Changan Automobile Comprehensive Test Site.
While strengthening its own research and development capabilities, Changan Automobile is also actively engaged in industry-level and cross-border cooperation in the face of industrial competition. January 11, 2018, Changan Automobile signed a strategic cooperation agreement with Huawei, China Mobile and China Mobile Internet of Things to comprehensively develop joint research on LTE-V and 5G vehicle networking. January 15, 2019, the "Changan-Huawei Joint Innovation Center" was officially inaugurated. Changan Automobile and Huawei began a comprehensive and in-depth cooperation on forward-looking technologies in the field of intelligence.
The open mindset of inclusiveness has further promoted Changan Automobile to build the “Beidou Changan Automobile Intelligent Strategic Alliance and Mission Shangri-La new energy strategy in the field of intelligent and new energy. Through in-depth cooperation with Baidu, Tencent, Huawei, FAW and Dongfeng, Changan Automobile established an industrial ecosystem covering the Internet, intelligent, upstream and downstream of the new energy industry chain, universities, local governments and other high-quality resources to advance development of China's automobile industry.
In the results of the evaluation of the Nationally Recognized Enterprise Technology Center announced by the National Development and Reform Commission in 2017-2018, Changan Automobile ranked third in the country and first in the industry with 96.4 points, and its R&D strength ranked first in the Chinese automotive industry for five consecutive years. In the final evaluation of the 2018 China Automotive Industry Science and Technology Award issued by the Science and Technology Awards Working Committee of China Society of Automotive Engineers, Changan Automobile won 9 awards, and the total number of awards ranked first in the automotive industry.
In the field of automobile manufacturing, Changan Automobile, who boasts about 17 million users, is a provider of high-quality products with the lowest complaint rate and a good reputation.
In the field of intelligent driving, Changan Automobile has also been at the forefront of the industry. It has mastered more than 100 intelligent technologies in three categories and obtained auto-driving road test licenses from California and Chongqing, China, and has run more than 12 million kilometers of tests. At present, the L1 driver assistance technology developed by Changan Automobile has been widely applied in mass production models. The L2-class automatic driving technology has been mass-produced, and the L3-class automatic driving technology has achieved partial mass production. It is expected to achieve full mass production in 2020. In August 2018, Changan Automobile became the first L4-class autopilot commercial demonstration operator, and the L4-class is expected to be mass-produced in 2025.
In the field of new energy vehicles, Changan Automobile began research on new energy technologies in 2001, and has formed core functions such as system design, vehicle integration, and component development. It has built 15 laboratories covering 6 major fields of new energy, and has filed over 580 patents. Up to now, Changan Automobile has set up two research and development bases in Chongqing and Beijing and integrated battery production bases in Chongqing, forming the production bases of new energy vehicles in seven cities including Chongqing, Beijing, Baoding, Hefei, Nanjing, Nanchang and Shenzhen.
Domestic and foreign auto companies have both competition and cooperation
Since 1979, the world's leading multinational auto companies have basically established joint ventures in China, and most of them operate well. These joint ventures have brought rich returns to both Chinese and foreign partners.
State-owned automobile companies such as Changan, FAW, Dongfeng, SAIC, BAIC, and Guangqi have not only learned the technology, cultivated talents, but also provided tremendous help for the development of independent brands through joint ventures and cooperation. Joint ventures support the independent brands have become a common phenomenon in the industry.
International auto parts giants came to China to set up a factory and established a complete auto parts supply system, which laid a foundation for the development of self-owned brand cars.
The development of Chinese passenger car brands is growing up in the fierce market competition in an open environment. After more than a decade of development, China’s own-brand cars, represented by Changan Automobile, have already gotten rid of the tag of “low quality, low price, low-end”. Great progress has been made in the automotive design, product quality, process level, core technology and other aspects, making China’s own-brand the backbone of the Chinese automotive industry.
In recent years, a number of star models of China's own brands have emerged, and the recognition of domestic consumers has continued to increase. The market share of the brands is also rising. In the fastest-growing SUV segment, those brands have surpassed joint venture brands and accounted for more than 60% of the market.
In the past few decades, Chinese and foreign auto companies have both competition and cooperation in the Chinese market, and together they have expanded the Chinese auto market as well.
After the enforcement of the law, the Chinese auto market will be more open and fairer. For Chinese car brands, in a more open environment, it will only improve their ability to cope with market changes, and can help them better explore overseas markets.
For foreign companies, there are fewer restrictions on investment in China, which is conducive to further expanding investment and introducing more and better car models and technologies to promote the better and faster development of the Chinese auto industry.
In the automotive sector, foreign auto companies have a long history and strong brand power. Although Chinese auto brands have made rapid progress in these years, the time is still short, and there is a certain gap between brand premium and reputation.
In response to this development situation, Zhu Huarong, NPC deputy and president of Changan Automobile, submitted the "Suggestion on Boosting Chinese Automobile Brands" (hereinafter referred to as "Suggestion") at this year's "two sessions."
Mr. Zhu said in the "Suggestion" that boosting brands is the top priority for realizing the dream of car power. He suggested that large official events actively use Chinese brand cars and fully demonstrate the image of Chinese auto brands. And we should make full use of major media platform to guide and boost the brand of China's auto industry to create a good brand image. He also suggested that we should improve the network management to create a healthy public opinion environment in the automotive industry.
