ASSESSMENTS

U.S. Tariff Threats Give China All the More Reason to Reform Its Auto Sector

MIN READSep 24, 2018 | 09:00 GMT

A Chinese autoworker is pictured on an SUV production line for the BAIC Motor Corp. on Aug. 29, 2018. China aims to consolidate its automotive sector to make it more competitive. But the road to reform will be long and difficult.

(NICOLAS ASFOURI/AFP/Getty Images)

China's formidable but fragmented auto industry is ripe for a restructuring. As the world's largest auto producer, China now makes more cars than its market can handle. Yet China exports only a tiny fraction of the vehicles it produces. The Chinese National Development and Reform Commission recently proposed a plan to correct overcapacity and promote industrial consolidation. The initiative aims to consolidate the Chinese automotive sector to make it more competitive as the United States pushes for greater access to the domestic market -- and drives automakers elsewhere to look for new export destinations under the threat of increased U.S. tariffs. But the road to reform will be long and difficult....

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