ACEA

China, a special responsability

The European auto industry and China

The very rapid development of the Chinese automotive market in recent years has contrasted starkly with largely static markets elsewhere in the world. Between 1999 and 2003, China tripled its output of passenger cars and doubled the production of trucks. Long term, the country's rapid economic growth is likely to be reflected in continuing increased demand for vehicles, and some forecasts see China being the third biggest market worldwide by 2010.

This phenomenal expansion has been driven to a significant extent by joint ventures involving ACEA's members, whose investment in 25 facilities across China now represents 60% of foreign direct investment in the Chinese car industry and 50% of total Chinese vehicle production.

In Summary

The Chinese market is becoming ever more important and ACEAs representative office is one acknowledgement of this fact.

Chinese automotive manufacturers would benefit equally from the introduction of free trade and the introduction in China of standards in common with the other major world automobile markets.

ACEA CHINA OFFICE

In view of both the growing importance of the Chinese market to ACEA's members and the long-term commitment that they have shown to its development, ACEA was pleased to open its representative office in Beijing in October 2004. This office, ACEA's second overseas representation after that in Tokyo, will support and develop the common interests of ACEA members, closely co-ordinating with ACEA members' own representations in China and liaising with the Chinese authorities on all automotive-related issues.

ACEA acknowledges that much progress has been made by the Chinese authorities on opening up the domestic market to embrace foreign investment and hopes that the establishment of its representative office will help continue the dialogue that will lead to further steps in this direction. Liberalisation of trade relations will not only allow the benefits of ACEA members' expertise and experience to be more fully shared within China, but will also help open the door to Chinese automotive exports worldwide.

LIBERALISATION AND HARMONISATION

In this context, ACEA looks forward to the results of the renewal of the partnership and co-operation agreement with China. ACEA encourages dismantling of non-tariff barriers, in particular a softening of the Compulsory Certification system, with practical implementing measures. It would, in ACEA's opinion, be in China's own interests to fulfil the commitments of its accession to the WTO and to support the efforts of Working Party 29 in Geneva to harmonise technical rules for motor vehicles and to join the 41 countries that have agreed to adhere to the WP29 Agreement.

Similarly, ACEA hopes that the Chinese authorities will see the benefits of adopting measures to reduce CO2 emissions that are harmonised with those already agreed as a model within the EU. The progress that has been made towards achieving the CO2 reduction targets within the EU demonstrates that an integrated, fleet-wide average approach can deliver the necessary environmental benefits within a flexible framework that allows both manufacturers' technical requirements and consumer choice to be accommodated. The alternative model currently tabled in China, of legally-imposed fuel consumption limits by weight class not only removes this flexibility but would militate against both worldwide harmonisation and global competition.

INTELLECTUAL PROPERTY

There are other important legal issues in China, the resolution of which would further encourage investment in the automotive sector. These include a strong commitment to intellectual property enforcement and changes to liberalise the shareholding system for Joint Ventures.

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