LISTENING to the deputy director of the State Planning Commission Ye Qing last week, foreign vehicle manufacturers could have been forgiven for thinking they were no longer welcome in the Middle Kingdom.
China has placed an outright ban on all new complete vehicle manufacturing joint ventures until 1996 and after that only projects which guarantee at least 40 per cent local content will be allowed to go ahead.
Furthermore, Mr Ye said at a press conference in Beijing last Thursday that priority would be given to those foreign partners who had already demonstrated ''a good co-operative attitude'' in the field of spare parts and components manufacturing in China.
The message seemed to be clear, ''unless you invested in the automotive industry in the 1980s, you can forget about it now''.
While this might be good news for Volkswagen, Citroen, Chrysler and Peugeot, it must have come as something of a shock to the major American and Japanese manufacturers who took a rather more conservative approach to the emerging China market in the previous decade.
But while China's new controls on foreign investment in the automotive industry may, at first glance, appear draconian and overly protectionist, a more careful examination shows that with a little flexibility and imagination, it is still possible for newcomers to gain a substantial foothold in the mainland market.
While complete vehicle manufacture is currently not an option, there is nothing stopping foreign companies setting up parts and components joint ventures in China, thereby positioning themselves for that magic day in January, 1996, when hopefully they will be given the green light to start assembling those components into whole cars.
