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NDRC document to boost NEV efforts in private sector

Quietly the powerful National Development and Reform Commission (NDRC) released on its website a document titled “Measures to Encourage and Guide Private Enterprises in Their Efforts to Develop Strategic Emerging Industries” (Measures) dated August 15.

Drafted based on two State Council’s directives in 2010, the Measures lists 10 guidelines in support of private investment in the country’s seven strategic emerging industries: energy saving and environmental protection, new generation of info technologies, biological engineering, advanced manufacturing equipment, new energy sources, new materials and new energy vehicles (NEV).

Most significant in the 10 guidelines are removal of entry hurdles, equal access to public funding, participation in drafting government policy and standards, permission to build state- and provincial-level technology centers, investment in industrial equity funds and participation in international M&As.

Based on the Measures, the central and local government agencies are required to streamline existing entry conditions for private enterprises in the seven industries with an effort to remove “entry hurdles in such areas as registered capital, total investment, paid up capital, output capacity, land use, purchasing and bidding, etc.”

If enforced, this would mean that private investment in new energy vehicle manufacture may not need to follow the existing strict entry regulations for regular IC engine automobile assembly projects. Private NEV enterprises, including both OEMs and suppliers, are also hopeful in getting funding from the government.

The publication of the document is significant because it will have a direct bearing on the final version of China’s long-awaited New Energy Vehicle Development Plan for the next 10 years. The central government realizes that without the participation of the country’s energetic and innovative private sector, the goal for developing the emerging industries cannot be realized.

The biggest challenge, however, for such government directives, is how effectively they will be implemented.

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