Auto sets to be a hot spot for foreign investors

Automotive industry is expected to be one of the most popular sectors for foreign investment after China further opened some of its markets for foreign investors.

“The auto sector is a focus now,” said Cherrie Shi, a partner overseeing cross-border investment with law firm Baker McKenzie FenXun. “While China allows more foreign shareholding in business of new energy vehicles, many investors have applied to have a seat in the candidate list.”

Shi also said the policy relaxation is unlikely to grow into a big challenge for domestic carmakers since the implementation will be taken out step by step.

In June, China released a revised negative list, an approach that means the openness of all sectors except a proscribed few on the list. The new version has shortened significantly from the previous one, and fit into the expectation that China would further open the market to reinforce reforms at home.

In the first 10 months, China’s inbound foreign direct investment rose 3.3 percent to 701 billion yuan (US$107 billion) thanks to robust manufacturing and high-tech investment.