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Comments from NPC delegates highlight the need for government reform

During China¡¯s annual parliament meeting in March, the two-week sessions of the National People¡¯s Congress (NPC) and the National People¡¯s Political Consultative Conference (CPPCC), members of the country¡¯s automotive sector made, as usual, comments and suggestions on how to better develop China¡¯s automobile industry.


Different from last year¡¯s session, where many members made legislative proposals to the government in supporting independent innovation and branding, focus this year has been on energy conservation, environmental protection, new energy vehicles and most important how the government can have a coordinated role in providing the necessary policy and regulatory environment for the growth of the industry.


In a very outspoken way, Zeng Qinghong, vice chairman and general manager of Guangzhou Automotive Industry Corp. pointed out that ¡°a number of China¡¯s automotive policies, laws and regulations are outdated and incompatible with the current state of market development. If unchanged, they would hinder the sustainable growth of the country¡¯s auto industry.¡±


According to him as well as other members of the parliament in the automotive sector, currently the automobile industry is subject to the administration of ¡°too many bosses.¡± Automobile manufacturing, sales and distribution and aftermarket service are simultaneously controlled by at least a dozen different government departments.


As a result, various policies and regulations have been released which overlap and sometimes contradict one another. The classic case is that an OE manufacturer has to undergo three different government institutions to certify their vehicle products, incurring unnecessary cost and wasting valuable time in launching new products.


Moreover, relevant policies and regulations have failed to be implemented due to either immaturity or lack of enforcement mechanisms. It is a known fact that China¡¯s emission standards are not actively enforced. Another example is that the government¡¯s decision in support of the development of small-displacement vehicles lack specific policy measures and effective enforcement, according to NPC delegates.


The problems facing China¡¯s automobile sector are a good example that shows why the NPC and State Council have decided to further reform the government structure, favoring fewer but more comprehensive and efficient government ministries.


It may take some time before auto manufacturers in China no longer have to deal with ¡°too many bosses.¡± But the good news is that the central government is obviously aware of the problems and has decided to take a major step in the right direction of further reforming the government structure so as to provide consolidated and more efficient administration of the country¡¯s industrial sectors.

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