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Impact of new M&As rules on auto sector

By Su Yue (chinadaily.com.cn)
Updated: 2006-09-20 08:38

The new regulations on foreign acquisition of domestic enterprises came into effect on September 8, and was announced jointly by six ministries and commissions including the Ministry of Commerce and the State Council's State-owned Assets Supervision and Administration Commission.

Experts believe that the new rule will not exert much influence on China's auto industry, as compared with other industries, especially the machinery equipment sector.

The release of this new rule is aimed a solving problems which tend to endanger the domestic industry structure and threaten the nation's economic security. Meanwhile, the regulation provides practical guidance for local governments and enterprises to absorb foreign investments. These concerns, however, have been already resolved by the Automobile Industry Policy promulgated by the State Council in 1994.

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The full text is available in the September Issue ofAutoChina.