Beijing has put a brake on the rapid expansion of car manufacturing, discouraging foreign investment in assembly lines in the face of possible overcapacity.
The National Development and Reform Commission (NDRC), the top economic planning agency, said the policy was aimed at ensuring healthy development of the car sector.
For the first time, foreign investors are not welcome to build car factories in China, the world's largest car market, according to a list that outlines the industries that should invite overseas capital. The car industry was included in the commission's previous list in 2007.
'High-end manufacturing sectors will be the focus of China's efforts in drawing foreign direct investment,' the NDRC said. 'In order to keep the auto industry growing in a healthy manner, we decided to remove auto assembly from the list.'
The NDRC also said foreign investment in polysilicon plants would no longer be needed, but foreign backers for hospitals and financial leasing firms would be encouraged.
Car sales are slowing this year and industry officials predict a difficult year ahead because of economic uncertainties.
In November, car sales fell 2.42 per cent from a year ago, to 1.66 million, according to the China Association of Automobile Manufacturers.