At the same time that the textile frictions between China and the United States came to an agreement, the China-European auto parts trade has begun another dispute. It is reported that the cause of the dispute is that the General Administration of Customs of China, the National Development and Reform Commission, the Ministry of Finance, and the Ministry of Commerce jointly issued the "Measures for the Administration of Imports of Auto Parts and Components That Constitute the Characteristics of Complete Vehicles." In accordance with the provisions of the Measures, in order to substantially increase the autonomous production capacity of domestic parts and components, the imported goods and components that have been verified as constituting the characteristics of the whole vehicle shall be classified by the customs according to the entire vehicle, and the customs duty shall be levied at the tax rate of the entire vehicle and the value added during the import link. tax.
Obviously, this regulation "moves the cheese of the EU automobile giant". The EU automobile manufacturers, such as Germany Volkswagen, France Peugeot, and Fiat Italy, who have established joint ventures with domestic automakers in China, can no longer resort to low-tariff spare-part imports to make huge profits in the form of CKD. The EU believes that this kind of regulation has caused EU automakers to be artificially restricted in terms of trade.
In fact, the EU’s accusation of China’s auto parts import policy is nothing new. As early as last year when China's "automotive industry development policy" was published, the EU had similar criticisms. The formal proposal put forward at the China-EU Joint Committee on Trade and Economic Cooperation is due to various reasons, including both "near-worry" and "far-sightedness." “Nearly worrying†is that the EU automobile manufacturers recently represented by German Volkswagen have not been operating in China and the world. Reducing the tariffs on spare parts will not only help the EU automobile manufacturers that are joint ventures in China continue to enjoy a comfortable life in the form of CKD, but also benefit the parent companies of these companies to take advantage of the high export prices of spare parts. “Foresee†is: The EU is concerned that in the future, cars produced in China will “sweep†the European market like textiles. As pointed out by an industry insider in the European Union, it is "not surprising" that Chinese cars will enter Europe in the next 5 to 10 years. Just as it was thought 10 years ago that Chinese textiles would be put on the shelves of European markets in large numbers.
Regardless of whether the EU's accusations are reasonable, its fears are understandable. In recent years, Chinese auto exports have grown rapidly and have officially landed on the European market. According to customs statistics, the export value of China's auto products has reached 8.16 billion U.S. dollars this year, a year-on-year increase of 73%. The export volume from January to September of this year was US$7.81 billion, which is close to the level of last year. An analysis of the automotive industry pointed out that the wages of a car assembly line worker are US$55 per hour in the United States, US$30 per hour in Germany, and US$1.5 per hour in China. Obviously, even if China's current wage level is increased by another 10 times, it still has the advantage of low cost. The huge difference in wage costs has determined that in the coming years, China will surely become the world’s leading auto manufacturer and exporter.
Of course, all Chinese people hope and believe that while the Chinese auto industry has grown substantially in production and exports, its independent research and development capabilities have also been able to increase accordingly. This is precisely the most important purpose of the government's policies such as the “Development Policy for the Automobile Industry†and the “Administrative Measures for the Import of Auto Parts and Components that Constitute the Characteristics of the Vehicleâ€. The desire is good. The key is to be practical and feasible, and do not let others grasp the handle. The author believes that China can use "origin rules" to further evade the risks of auto parts trade. The so-called rules of origin is the standard for determining the origin of goods. According to the international practice, a country often determines whether the product is made domestically by setting the rate of appreciation. For example, the rules of origin of the North American Free Trade Area stipulate that the value-added rate of cars and other auto products in North America can be considered as North American products only when they have reached a value-added rate of 62.5%. If it fails to meet the 62.5% standard, even if it is produced in North America, it cannot be regarded as a North American product and still has to pay a high import tariff. If we can also, like North America, stipulate that only when China's added value reaches 62.5% or more, it can be regarded as domestic goods, and domestic cars that do not reach 60% are still regarded as imported cars, they still have to pay import duties. CKD production method Did not disappear? Moreover, this practice does not violate the WTO rules and the EU naturally has nothing to say.
Obviously, our automobile industry policy has great potential to be tapped.
Deputy Secretary General of China WTO Research Association Liu Li
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