Mainland carmakers will have to overcome additional hurdles if they want to invest in Russia where political maneuverings have led to changes in the investment climate. In addition to reports on the mainland last week that Russia was shelving import tax benefits, the country has tightened rules on new investments in building car manufacturing plants. Carol Thomas, JD Power's director of market intelligence, said that the mainland was beginning to have problems setting up manufacturing plants in Russia. 'They [mainland carmakers] would have to sign an industrial assembly agreement with the government for the commitment to porduce 25,000 cars per year, including incorporation of local painting and welding,' Ms Thomas said. Also, they must agree to reduce the proportion of imported components by 33 per cent within seven years if carmakers wanted to get reduced duties on components and other privileges, she said. So far, no mainland carmaker has signed an agreement with the Russian government but other big global carmakers such as Nissan, Toyota, Volkswagen and Suzuki already have done so. The new policies came after Russian President Vladimir Putin replaced his long-serving economic development and rrade minister. Mr Putin also took away two trillion roubles (US$80.3 billion) from the Economic Development and Trade Ministry, limiting the agency's ability to fund tax benefits. Mainland newspapers reported on Thursday that Russian officials said there were no black and white rules. The officials insisted that Russia encourage high-quality and major carmakers such as SAIC Motor Corp and First Auto Work to explore the Russian market. 'It's true the messages from the central government in Russia and their regional governments are not clear,' said executive director Lawrence Ang of Geely Automobile Holding. He agreed that it was difficult for carmakers to initiate new investments. A report from Sun Hung Kai Financial said Hong Kong-listed Great Wall Motor, the largest maker of pick-up trucks and sport-utility vehicles, had told analysts its planned Russian operations came to a halt due to a change in the country's policy on foreign-assembly licensing. Great Wall had planned to spend US$70 million to build a new plant in Russia's Tatarstan. The project was supposed to be operational by the middle of this year. Russia has been a large export market for mainland cars because consumers like them and they are inexpensive. In addition to benefitting from the sales, the mainland regards Russia as a stepping stone to the Eastern European market. Besides Great Wall Motor, the country's fourth-largest carmaker Chery Automobile has partnered Russia's state-backed car manufacturer Avtotor to assemble cars in Kaliningrad, a special economic zone between Poland and Lithuania. Chery spokesman Wang Wei said that the company had not received any indication of problems in its Russian operations. But information from JD Power suggests Russian authorities are going to pressure Avtotor to limit its work to painting and welding or else it will end its import duty privileges.