China mulls capacity curbs

China will stop "haphazard investment and redundant development" in its vehicle industry, an official from the state planning agency was quoted as saying.

A Reuters report said this apparently referred to proposed rules on investments in new capacity.

According to the news agency, Nian Yong, head of the National Development and Reform Commission's (NDRC) Department of Industrial Coordination, said the agency would soon publish and implement a new set of investment rules which, among other things, "will restrict industrial investment project management standards, strengthen regulation, prevent haphazard investment and redundant development," he said.

China is looking to fix what looks like never-ending excess capacity in the country's auto industry, which is showing signs of worsening, Reuters said.

The report said Nian's remarks came as the industry has sought to water down proposed NDRC rules which were published in July in draft form to seek public comment.

It was not clear when the new rules would take effect or whether the NDRC would agree to scale down from the draft which some automaker officials described as alarming.

"We have made some quite big modifications (to the proposed rules) after we received the industry's feedback," NDRC official Gu Ziming told Reuters.

Several automakers recently announced capacity expansion but China is mulling a limited ban on investments in new green field capacity to produce both combustion engine and battery electric cars unless certain conditions are met, the report said.

These would include good capacity utilisation, spending on research and development plus commitment to electric cars.

Read Full Article Here

Related posts

Leave a Comment