CAAM insists restrictions on intl automakers

China's auto lobby has opposed a possible move by Beijing to ease restrictions on foreign ownership in the car industry, saying that the move would seriously weaken the position of domestic carmakers.

Dong Yang, secretary general of the China Association of Automobile Manufacturers (CAAM), said that if foreign ownership rules were relaxed, Chinese carmakers would lose control of joint ventures they now own and run together with global automakers.

"Foreign ownership being capped at 50 percent is the red line we must not cross because we need to protect our Chinese brands," Dong said in a statement posted on the CAAM Website. "From another perspective, current restrictions have not dampened global carmakers' enthusiasm whatsoever to invest in China, so why should we be more open?"

China has required global automakers including General Motors, Ford Motor Co, Volkswagen Group and Toyota Motor Corp to form joint ventures in order to produce cars in the country, hoping that Chinese carmakers can absorb foreign technology and management expertise to become more competitive.

The Ministry of Commerce told a media briefing in Beijing last month that the government would likely relax foreign investment restrictions soon in areas including auto manufacturing.

In addition to the 50 percent ownership cap, the current policy calls for foreign automakers to set up a jointly run technical center in China and to transfer certain technology to their local partners.

CAAM's opposition comes in the wake of indications by several Chinese policymakers that they are considering relaxing foreign investment rules in China's automobile industry.