President Vladimir Putin of Russia said on Friday BRICS leaders were not ruling out the possibility of increasing the number of the bloc’s member states, but the decision on accepting more countries to the organisation should not be taken in a rush.
 
BRICS is the acronym coined by British Economist Jim O’Neill meant for an association of five
major emerging national economies: Brazil, Russia, India, China and South Africa.
 
“The candidates have not backed out, on the contrary, they have demonstrated readiness and to work within BRICS as full-fledged members, but at today’s meeting in a small format all my colleagues approached accepting new members to BRICS with caution.
 
“However, they certainly do wish to work with other states and do not exclude the possibility of BRICS expansion,” Putin said at a news conference after the BRICS summit in South Africa.
 
Putin said that the expansion issue needs further discussions, as such a serious question could not be solved “in one fell swoop.”
 
He also said that all decisions are being taken on the basis of consensus.
 
“There is really no some kind of formal leadership. All issues are resolved, decisions are being taken on the basis of consensus, with full respect for the interests of all participants in this
organisation,” Putin said.
 
“This is its huge advantage,” the president said.
 
 
 
Source: Bloomberg News

South Africa invests eight times more in China than the other way around.

The $14.7 billion (R193 billion) in Chinese investments – which include loans to Transnet and Eskom – announced during Chinese President Xi Jinping’s state visit to South Africa this week, are dwarfed by South Africa’s investment in that country, which stood at just over $80 billion in 2016, according to a recent report compiled by Deloitte for the Department of Trade and Industry.

 
 

At that same time, China’s investment in South Africa was $10 billion.

Trade and industry minister Rob Davies pointed out this discrepancy this week during this Brics summit in Johannesburg, when he was asked whether the new Chinese investments would not “overcrowd” the South African market.

“We are in the situation where we welcome more,” Davies said. “Of course when they do invest we indicate that we are looking for productive activity and that we are looking for them to increase the value addition.” He also called for investment-led trade.

Naspers alone owns a $175 billion stake in Chinese internet start-up Tencent, while China’s major investment in South Africa is the recently-opened $840 million (R11 billion) BAIC vehicle plant in the Coega Industrial Development Zone

China is the most significant investor in South Africa out of the Brics countries, and its investments created on average 301 jobs per project. India was the second largest investor, with $61.2 million and an average of 135 jobs per project.

Between 2003 and 2017, Brics countries officially invested a total of $17.8 billion in 189 projects in South Africa, creating 36 852 jobs. In the last two years, however, the number of projects from these investments dropped to the levels it was at in the early 2000s.

South Africa held $82 billion in foreign investments in Brics in 2016, while Brics countries only held $11 billion in foreign investments in South Africa.

Investments from South Africa into Brics countries surged since South Africa became a Brics member in 2010.

South African investment in Brics countries as a whole grew from a net negative position of $261 million in 2001 to a net positive position of $71 billion fifteen years later.

This could be attributed to, amongst others, “an increased foreign expansion by South African firms and a considerable relaxation of exchange controls by monetary authorities in 2011 that allowed South African companies to invest much larger sums abroad,” according to the Deloitte report.

 

Source: The Business Insider

China would invest 14.7 billion dollars in South Africa President Cyril Ramaphosa said on Tuesday after talks between the two countries, news that sent the rand one percent firmer.
 
Speaking at the same event, Chinese President Xi Jinping said the world’s second-biggest economy would take active measures to expand imports from South Africa to support development in Africa’s most industrialised economy.
 
Xi arrived South Africa on Monday night for a State visit ahead of the much anticipated 10th BRICS Summit in Sandton.
 
This is Xi’s third visit to South Africa, having visited the country for the 2013 BRICS Summit, and the 2015 Forum on China-Africa Co-operation. Xi made State visits to Senegal and Rwanda before arriving in South Africa.
 
The two presidents engaged in bilateral talks and evaluated progress achieved by the two countries on the Strategic Programme with specific reference to the six priority areas identified in 2015.
 
Those areas include the Alignment of industries to accelerate South Africa’s industrialisation process; Enhancement of co-operation in Special Economic Zones; Enhancement of marine co-operation; Infrastructure development; Human resources co-operation; as well as Financial co-operation.
 
China has been South Africa’s largest trading partner for nine years in a row, and South Africa is China’s largest trading partner in Africa.
 
Two-way trade has reached a historic 39billion dollars, 20 times the volume of that at the onset of official diplomatic relations. Direct Chinese investment in the South African economy has also grown eight fold, reaching 10 billion dollars.
 
While there is a trade imbalance between China and South Africa, both countries have implemented mechanisms to address these discrepancies.
 
 
Source: PMnewsNigeria

The Central Bank of Nigeria (CBN) on Friday sold Chinese Yuan for the first time through an auction-based system designed for Chinese Yuan foreign exchange window with the People’s Republic of China (PBoC).

According to a report by Bloomberg, CBN Governor, Godwin Emefiele, approved the auction to take place on Friday.

The CBN and PBoC had signed a three-year renewable bilateral currency swap deal worth about N720 billion or 15 billion Renminbi to facilitate trade between Nigeria and China and ensure stability in the foreign exchange market, among others.

Earlier this month, CBN acting Director of Corporate Communications, Isaac Okoroafor, while speaking at a Town hall meeting to enlighten stakeholders on the agreement between the two apex banks in Lagos, said the idea behind the agreement was to ease the pressure on the nation’s foreign exchange reserves which was occasioned by the high demands of U.S dollar for transactions.

“This is will help us build our reserves to give confidence to investors that we have the arsenal to maintain the international value of the Naira,” he said.

The CBN asked banks to bid for renminbi between 9:00 a.m. and midday, while results might probably be announced by Monday, according to the report.

A source who spoke with Bloomberg said that, the size of sale or the exchange rate was not stated by the apex bank, noted that allocations will be for businesses importing raw materials and machinery.

Recall that the CBN said it would announced the exchange rate of transactions in the Chinese Yuan window after the first auction, adding that banks are not expected to charge more than 50 kobo spread on the rate.

China is Nigeria’s biggest trading partner after the U.S., with volumes between the two totaling $9.2 billion in 2017, according to data compiled by Bloomberg. Nigeria runs a deficit, importing $7.6 billion of goods including textiles and machinery from China and exporting just $1.6 billion, mainly oil and gas.

Source: The Ripples

China’s President Xi Jinping pledged during a visit to Senegal on Saturday to strengthen economic ties with Africa, a continent already awash with cheap Chinese loans in exchange for minerals and huge construction projects.

Xi arrived in Senegal on Saturday for a two-day visit to sign bilateral deals, the first leg of an Africa tour that will also take him to Rwanda and South Africa, the latter for a summit of BRICS countries: Brazil, Russia, India, China and South Africa.

China now does more trade with Africa than any other nation does, and its consistent overtures to the continent contrast sharply with the United States, whose President Donald Trump has shown little interest in it.

The visit was Xi’s first trip to West Africa as president, but his fourth to Africa, he told a joint press conference with Senegalese President Macky Sall after their third ever meeting.

“Every time I come to Africa, I have seen the dynamism of the continent and the aspirations of its people for development,” Xi said. “I am very confident in the future of Sino-African relations.”

Earlier, Xi was greeted by a brass band and hundreds of people waving Chinese and Senegalese flags and wearing T-shirts emblazoned with the two leaders’ faces. 

LOADING UP ON CHINESE DEBT
Africa is in the midst of a boom in infrastructure projects, managed and cheaply financed by China, part of Xi’s “Belt and Road” initiative to build a transport network connecting China by land and sea to Southeast Asia, Central Asia, the Middle East, Europe and Africa.

China has pledged $126 billion for the plan, which has been praised by its supporters as a source of vital financing for the developing world. In Senegal, Chinese loans have financed a highway linking the capital Dakar to Touba, its second main city, and part of an industrial park on the Dakar peninsula.

China’s ambassador to Senegal Zhang Xun was quoted by the local press in March as saying China had invested $100 million in Senegal in 2017.

“Senegal takes a positive view of China’s role in Africa,” Sall said at the news conference. “For its contribution to peace and stability and equally ... for the financing of budgets.”

But critics say Africa is loading itself up on Chinese debt that it may struggle to repay, with estimates ranging in the tens of billions of dollars. That could leave African nations with no choice but to hand over controlling stakes in strategic assets to the Chinese state.

U.S. officials have warned that a port in the tiny Horn of Africa nation of Djibouti, a host to major U.S. and French military bases, could suffer this fate, although Djibouti rejects the fear.

In Guinea, meanwhile, one of the world’s poorest nations, China is lending $20 billion to the government in exchange for aluminium ore concessions.

As well as trade and minerals, China has also seen Africa as a source of political support. Chinese diplomacy has, as of May this year, succeeded in getting every African country except Swaziland to break off diplomatic relations with Taiwan, which China sees as a renegade province.

(Reuters)

The 10th BRICS summit to be hosted by South Africa is going to be closely watched. It comes at a time when extraordinary global political and economic challenges are facing the world.

The BRICS bloc is made up of 5 of the leading countries in the global South — Brazil, Russia, India, China and South Africa.

The challenges facing the world range from country specific problems relating to domestic poverty, inequality and unemployment to climate change and a global economic system that is biased in favour of corporate interests, particularly in finance and technology.

One of the most immediate political challenges relate to the changing dynamics in global economic governance. The current global powerhouse, the US, appears intent on starting trade wars with both China and the European Union. Africa can’t avoid being adversely affected by a trade war between these three economic powers, which are its three largest trading partners.

The US is also pulling back from multilateral governance arrangements that it created. For example, it withdrew from the upcoming United Nations (UN) conference on migration and from the UN Human Rights Council. And Washington is effectively paralysing the World Trade Organisation (WTO) by refusing to agree to the appointment of new judges at the WTO Appellate Body.

These developments are creating a volatile and unpredictable situation for all countries. Small players on the global stage, like South Africa and other countries on the continent, face the prospect of becoming collateral damage in the destruction of the current global governance arrangements.

Given all these complex challenges, how should we judge the success of the BRICS Summit?

We can use three tests: is BRICS being strengthened? What benefits will accrue to Africa? And how is the bloc planning to influence global economic governance reform?

BRICS strengthening

One goal of the upcoming summit should be to strengthen the relationship between the BRICS partners.

A concrete way of measuring this will be to look at the number and quality of agreements to emerge out of the summit. A successful summit will result in a range of substantial agreements being reached. The world will be able to scrutinise the outcome in the communique released at the end of the meeting.

It is important to note that the summit is the apex event in a year-long process. During the year various groups of BRICS government officials, civil society groups and technical experts meet to discuss issues of common interest. They have included technical groups such as the BRICS water forum and a committee looking at customs cooperation. Others have involved political matters, such as meetings of foreign affairs ministers and government officials who help guide their leaders to the summit (known as Sherpas).

The participants in these meetings try to reach agreements on issues of mutual interest – such as establishing a BRICS vaccine research centre – or finding ways to collaborate in sectors like tourism. Their job is also to try and resolve differences.

These efforts feed into the work of the summit as the Sherpas prepare the statement of what has been agreed. Details of the agreements that have been struck will be released in a statement at the end of the summit.

BRICS in Africa

Given that the theme for this year’s summit is: “BRICS in Africa: Collaboration for Inclusive Growth and Shared Prosperity in the 4th Industrial Revolution”, it’s reasonable to expect the BRICS summit to produce benefits for Africa.

One area that would be beneficial for the continent would be a signal from the leaders that the BRICS members are willing to commit to funding infrastructure projects on the continent. This is important because Africa is in the process of putting in place an ambitious new Continental Free Trade Agreement. Successful implementation will require constructing infrastructure that can link the continent both internally and with other parts of the world.

BRICS could position itself for a critical role in the funding of these infrastructure projects.

Two obvious vehicles for such funds are the BRICS’s New Development Bank and the funds that China has created to support its One Belt One Road Initiative.

Thus a test for summit success will be whether it generates new financing for sustainable infrastructure in Africa, and the nature of the financing.

Global governance reform

One goal shared by all the BRICS states is reforming global economic governance structures like the World Bank and International Monetary Fund (IMF). The bloc hasn’t been particularly successful in this mission. But this year may be an opportune time to promote reform.

Actions by the US have undermined its leadership position in the world and may have made other countries more open to governance reforms in key international economic organisations. This is particularly relevant for the IMF which is reviewing its quota allocations. A shift would lead to the world body being more responsive to the concerns of its poorer member countries.

There is a longstanding call for the inclusion of a third African chair on the IMF board. It is unconscionable that the 46 sub-Saharan African countries have the lowest level of representation of any region on the IMF board. South Africa should push BRICS to stand behind this call.

The BRICS should also support making the IMF more accountable to countries affected by its operations. This could be done by demanding that the IMF create an independent accountability mechanism. It is currently the only multilateral financial institution without one.

A key benefit of the BRICS is its potential to lead efforts to meaningfully reform the global economic system. It therefore behoves the citizens of BRICS countries to hold their governments accountable for fulfilling this potential.

 

Danny Bradlow, SARCHI Professor of International Development Law and African Economic Relations, University of Pretoria

This article was originally published on The Conversation. Read the original article.

Chinese cities have some of the world's tallest skyscrapers, including the  almost 600m-tall Ping An Finance Centre in Shenzhen, the 540m-tall CTF Finance Centre in Guangzhou, and the 527m-tall China Zun tower in Beijing.
 
More recently. construction began on the mega-tall Shimao Shenzhen-Hong Kong International Centre in Shenzhen. 
 
At 688m tall, it could become the second tallest skyscraper in the world when it opens in 2024. (The even taller Dubai One Tower is also currently under construction.) As Dezeen notes, both high rises will surpass the 631m-tall Shanghai Tower, which currently holds the title of world's second tallest skyscraper.
 
Shimao Group, the Shenzhen-Hong Kong International Centre's developer, is not releasing many design details yet, but China Daily reports that the firm has invested about $7.5 billion in the project. It will have a floor surface area of over 315,000m².
 
The tower will be part of a larger complex that includes apartments, offices, a startup incubator, hotels, shopping centres, international schools, and a convention centre in Shenzhen's Longgang district.
 
The project builds on the city's urbanisation boom, which began in 1979 when China opened itself to capitalism and foreign investment. Shenzhen — a formerly poor fishing community of just 30,000 people — was the first city the country chose to rapidly develop. 
 
Since then, the city has transformed into one of China's largest tech hubs and epicenters of high-rise development. In 2017, Shenzhen completed more skyscrapers than any other city in the world.
 
By some estimates, Shenzhen's population now exceeds 12.5 million, making it one of the fastest growing megacities.
 
Source: Business Insider

Sometimes a throwaway sentence is more illuminating than it ought to be. A line in an article in Roads & Kingdoms in January about the Chinese in Lagos did just that. Near the end of the piece, the author wrote:

On my final night in Lagos, Fang invites me to the Huawei offices for dinner, handing me a guest pass and taking me through a winding corridor that opens out into a futuristic canteen. Staff can pay for their meal through Wechat, the Chinese social media app.

Being fairly acquainted with Nigeria’s tech scene and mobile money regulatory environment the last sentence jumped out at me—paying for things with WeChat is not something that is currently available to Nigerians as an option. I asked a couple of my friends in the Lagos tech scene how the Chinese were able to do this in Lagos and they simply shrugged and said “they are running their own little country here.”

It is not hard to come by data showing the scale of China’s investments and influence in Africa—the China Africa Research Initiative at the Johns Hopkins University estimates that, from 2000 to 2015, the Chinese government, banks and contractors extended $94.4 billion worth of loans to African governments and state-owned enterprises.

From a few million dollars in 2000, the amount of loans topped $16 billion in 2013 alone. Whether or not these loans are value for money or just a flow of money from the Chinese government to Chinese companies via Africa remains a matter of debate. A $600 million Chinese loan to fund the installation of CCTV cameras across the Nigerian capital Abuja has since been mired in corruption and scandal. It is hardly an isolated story.

But there is another part of the Chinese story in Africa that is rarely documented. That of the ordinary businesses who head to Africa, often without state backing, seeking to make a fortune. These businesses have mostly been careful to remain outside the spotlight and rarely ever speak to local media. A surprising McKinsey report from June 2017, based on extensive fieldwork, estimated that there were more than 10,000 Chinese owned firms operating across Africa, nearly four times what the numbers from the Chinese Ministry of Commerce (MOFCOM) showed. No one can say for sure—not even the Chinese government—how many Chinese businesses are in Africa, never mind what they are doing there.

One of the McKinsey report’s authors, Irene Yuan Sun, has however written a book—The Next Factory of The World: How Chinese Investment Is Reshaping Africa—that helps to illuminate the experience of Chinese businesses in Africa. Being of Chinese descent herself, she was able to get Chinese business owners in Africa to open up in a way that they almost never do to local media. What emerges is a surprising mix of success and failure with a good dose of fear and loathing thrown in. As someone who grew up in Nigeria until a decade and a half ago (and still maintains strong ties to the country), I found the book to be full of surprises and insights.

A broad pattern to these businesses can be sketched out—a Chinese business finds business increasingly hard to do in China, mostly due to rising costs and fierce competition. The business owner embarks on an exploratory trip to an African country and makes a decision to invest on the spot. In short order, they are pouring millions of dollars into building a factory in the African country. Beyond the narrow sectors of the economy in which they decide to operate, the Chinese businessmen remain almost completely out of sight to the local population. When Chinese businesses get reported on in the local newspapers, it is almost always about the maltreatment of local workers or a racist incident (often borne of misunderstanding).

In Nigeria, I am yet to hear of a marriage between Chinese and Nigerians in Nigeria and in my frequent visits to Nigeria, it is hard to recall bumping into Chinese revelers on a night out or sharing a restaurant or bar with them. Nigerians and Chinese in Nigeria are, to borrow Longfellow’s famous phrase, like ships that pass in the night and speak to each other in passing. This was comically illustrated by a line in Sun’s book where the author interviews a Chinese businessmen about the seemingly permanent tension between Chinese factory owners and Nigerian workers. In frustration, the Chinese businessman said, “Nigerians complain that Chinese people spit. But they pee in public on the side of the road all the time!”

Some of them have had spectacular success such as the Tung family who run a billion dollar steel business and sit on the board of one of Nigeria’s premier development finance institutions—Africa Finance Corporation.

Then there’s the Lee family whose Lee Group produces everything from bottled water to bread as well as 1.2 million pairs of flip-flops everyday, retailing them for around a dollar a pair. They have practically a 100-percent market share of the flip-flop market in Nigeria and West Africa but this monopoly is not visible to most people purely because they have achieved it through very low prices making it impossible for smugglers to compete against them and crucially, dispensing of the usual practice of local businessmen to get the government to ban or impose tariffs on the competition for them.

Yet there is more to the story. The Tungs and Lees are only the surviving two families out of four that settled in Nigeria decades ago. The other two lost their businesses in one of Nigeria’s many economic shocks. There have been plenty of Chinese failures across the continent and in Nigeria, in particular. The stories of Jason Han and John Xue are particularly instructive. In their 50s and seemingly bored in semi-retirement in China, they heard about a Chinese company that was struggling to develop a free trade zone with a state government in Nigeria’s south west.

They embarked on a week long trip to Nigeria, their first ever visit to the country, and while there concluded that they could help the state turn around the project. In a matter of weeks they had moved to Nigeria and taken over the running of the free trade zone. In four years under their management, the zone managed to attract 24 businesses and provide employment to 4,500 people, with only 200 of those being non-Nigerians. The zone was praised by the Nigerian and Chinese governments as a shining example of China-Africa relations.

And then the music stopped. The old management company which had been terminated still had friends in the state government and decided it now wanted the zone for itself again. A campaign of harassment and intimidation was launched against Han and Xue including the detention of one of their managers for two weeks. Jason Han appealed to the Nigerian president in an open letter about their ordeal but in the end, they were forced to abandon the zone and leave Nigeria.

This illustrates a particular kind of risk faced by Chinese businessmen in countries like Nigeria—politicians are able to trample on their rights without consequence because the Chinese are still viewed with some suspicion by the average Nigerian. The Chinese are thus ever only one infraction away from being scapegoated by a politician seeking cheap popularity or votes (all Nigerian politicians are populists) and the Chinese government is always reluctant to come to the aid of private Chinese businesses in Africa, if it even knows they exist at all.

What then to make of all of this? The most obvious is that there are a very large number of Chinese businesses on the ground in Africa making their way in often impossible circumstances. Many of them have met with great success and many others have lost everything.

Even after spending decades in the country, you often cannot find any meaningful reporting on them in the local media as is the case with the Lees and Tungs in Nigeria. Meanwhile the western media tends to focus, sometimes anxiously, on the government side of the relationship that comes in large dollar numbers but is often far less than meets the eye. The Chinese and their hosts continue to live side by side but far apart—the gap between them inevitably filled by mutual suspicion. The Chinese in Lagos retreat into their own world where they can make payments with WeChat, just like in China, thousands of miles away.

One can be optimistic or pessimistic about the future of this relationship. Much of it is useful in providing cheap products and employment while a lot of it remains frustrating borne of the seeming refusal of the Chinese to engage with their hosts creating a kind of standoff.

Even after many decades of doing business in Africa, Chinese businesses in Africa can hardly claim to be friends with their hosts. Like ships that pass in the night and speak to each other in passing.

 

Credit: Nigerians in South Africa

President Donald Trump directed the US Trade Representative to prepare new tariffs on $200bn (R2.77tr) in Chinese imports Monday as the two nations moved closer to a potential trade war.
 
The tariffs, which Trump wants set at a 10% rate, would be the latest round of punitive measures in an escalating dispute over the large trade imbalance between the two countries. Trump recently ordered tariffs on $50bn (R692.77bn) in Chinese goods in retaliation for intellectual properly theft. The tariffs were quickly matched by China on US exports.
 
"China apparently has no intention of changing its unfair practices related to the acquisition of American intellectual property and technology," Trump said in a statement Monday announcing the new action. "Rather than altering those practices, it is now threatening United States companies, workers, and farmers who have done nothing wrong."
 
Trump added: "These tariffs will go into effect if China refuses to change its practices, and also if it insists on going forward with the new tariffs that it has recently announced."
 
Trump said that if China responds to this fresh round of tariffs, then he will move to counter "by pursuing additional tariffs on another $200bn (R2.77tr)of goods."
 
Trump's comments came hours after the top US diplomat accused China of engaging in "predatory economics 101" and an "unprecedented level of larceny" of intellectual property.
 
He said China's recent claims of "openness and globalisation" are "a joke." He added that China is a "predatory economic government" that is "long overdue in being tackled," matters that include IP theft and Chinese steel and aluminum flooding the US market.
 
"Everyone knows ... China is the main perpetrator," he said. "It's an unprecedented level of larceny."
 
"Just ask yourself: Would China have allowed America to do to it what China has done to America?" he said later. "This is predatory economics 101."
 
The Chinese Embassy in Washington did not immediately respond to a request for comment.
 
Pompeo raised the trade issue directly with China last week, when he met in Beijing with President Xi Jinping and others.
 
"I reminded him that's not fair competition," Pompeo said.
 
Wall Street has viewed the escalating trade tensions with wariness, fearful they could strangle the economic growth achieved during Trump's watch. Gary Cohn, Trump's former top economic adviser, said last week that a "tariff battle" could result in price inflation and consumer debt — "historic ingredients for an economic slowdown."
 
Pompeo on Monday described US actions as "economic diplomacy," which, when done right, strengthens national security and international alliances, he added.
 
"We use American power, economic might and influence as a tool of economic policy," he said. "We do our best to call out unfair economic behaviors as well."
 
In a statement, Trump says he has an "excellent relationship" with Xi, "but the United States will no longer be taken advantage of on trade by China and other countries in the world."
 
Source: Fin24
Beijing - Global carmakers touted their latest electric and SUV models in Beijing on Wednesday, as China promises a more level playing field in the world's largest auto market where domestic vehicles are making major inroads.
 
Industry behemoths like Volkswagen, Daimler, Toyota, Nissan, Ford and others are displaying more than 1000 models and dozens of concept cars at the Beijing auto show.
 
Thousands of Chinese auto enthusiasts are expected to wander the halls of the mega exhibition centre this week, with electric cars and gas-guzzling sport-utility vehicles grabbing the spotlight.
 
Joint ventures imperative for automakers 
 
Nissan presented its first Made in China electric car produced for Chinese consumers, the four-door Sylphy Zero Emission, with a drive range of 338km.
 
"The new Sylphy Zero Emission is the next step in our electrification strategy for China," said Jose Munoz, Nissan's chief performance officer, adding that the company will unveil 20 electrified models over the next five years.
 
Auto executives may have their minds on the boiling trade war between Beijing and Washington, with every twist and turn fanning fears that it could bring their plans for China to a screeching halt.
 
But last week Beijing announced it will liberalise foreign ownership limits in the sector, a move seen as a possible olive branch to President Donald Trump, who has railed against China's policies in the sector.
 
China currently restricts foreign auto firms to a maximum 50% ownership of joint ventures with local companies.
 
The changes will end shareholding limits for new energy vehicle firms as soon as this year, followed by commercial vehicles in 2020 and passenger cars in 2022.
 
Foreign automakers who account for more than half of vehicle sales in China have cautiously welcomed the changes, with VW saying it has "strong" local partners in their joint ventures.
 
"This will have no impact on our JVs. But the overreaching principle is important. Hopefully, liberalisation will as well help for fair competition, and having a level playing field," Jochem Heizmann, CEO of Volkswagen Group China, told reporters.
 
All-electric future
 
The show comes as China's market hits a transition period -- the explosive growth in car sales seen over the last decade slowed last year and data from early this year point to a continued slump for many vehicle types.
 
Chinese consumers are following their American peers toward SUVs while policymakers in Beijing push an all-electric future.
 
Ride-sharing is also on the up. On Tuesday Didi - China's answer to Uber - announced it had joined forces with some 30 partners, including Renault and Volkswagen, to develop vehicles and products specifically tailored for ride-sharing.
 
Accounting for some 28.9-million car sales in 2017, the Chinese market could soon match those of the European Union and United States combined.                                           
 
General Motors sold over four million cars here last year, more than in the United States. Volkswagen sold more than three million, roughly six times its home market.
 
But domestic firms are outselling foreign firms in the SUV segment.
 
In the electric car market the figures are even more lopsided, as Beijing has heaped money on projects to dominate what it sees as the future.
 
At the auto show, the domestic upstarts have a separate exhibition hall mostly to themselves, 124 of the 174 electric car models on display are homegrown.
 
Government subsidies help consumers purchase the green cars, while policymakers are planning a quota system to force producers to build electric vehicles, with plans to one day phase out gas vehicles altogether.
 
Volkswagen announced Tuesday investments of $18-billion in electric and autonomous vehicles in China by 2022.
 
"China is our second home," recently installed chief executive Herbert Diess said at a Beijing press conference, with its market set to be "the biggest" worldwide for electric cars. 
 
Source: Wheels24
 
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