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Auto exports get strong stimulus
By He Na (China Daily)
Updated: 2004-04-05 08:45

China will speed up efforts to boost automobile and component exports, according to a senior trade official.

The government has set an export target of US$70 billion to US$100 billion a year by 2010, said Commerce Vice-Minister Wei Jianguo.

If successful, the exports will account for 40 per cent of total automobile and component sales in China at the time, he said.

Wei revealed the export goal at a forum which ended on Saturday in Changchun, capital of Northeast China's Jilin Province.

"Our short-term target is to increase automobile and component exports to US$15-20 billion next year," he said.

Exports grew by 34.4 per cent year-on-year to US$4.71 billion in 2003, which included US$400 million worth of automobiles.

"Boosting automobile and component exports is in line with our auto and component industry's development trend under world economic globalization," Wei said.

"The move will help China attract more foreign investment, accelerate the auto industry's restructuring and technical upgrading, and reinforce our position as an automobile and component manufacturing base in Asia."

All of the world's renowned component producers, such as Delphi of the US and Germany's Bosch, have invested in China as all global auto giants have formed ventures with local partners to cash in on the booming vehicle market.

There are more than 5,000 component plants and 120 vehicle plants in China. Over 1,200 component plants are foreign-funded.

"Foreign investment will be critical for us to achieve our automobile and component export target," Wei said.

"China is likely to become the component supply centre for international auto manufacturers in the future, according to the current development.

"The nation is also expected to export passenger vehicles in large volumes around 2006 as quality and prices of domestically-made vehicles are reaching international levels, which will also significantly increase our exports of components."

China will take a slew of steps to boost the export of automobiles and components, Wei said.

The government will encourage mergers and acquisitions in the auto and component sector to form big and internationally competitive multinationals "in real terms," he said.

At present, China's automobile and component sector is too small to directly compete with foreign rivals in the international market.

"We also hope to build 5 to 10 specialized automobile and component exporting bases with relatively high economies of scale in China in several years," Wei said.

Japan's Honda Motor and two Chinese partners - Dongfeng Motor Corp and Guangzhou Automobile Group - have formed a small-sized car venture in Guangzhou, capital of South China's Guangdong Province. All cars will be exported and production will start later this year.

The government will drive and support domestic automobile and component companies to pass all kinds of international quality inspections, Wei said.

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