If you order your custom term paper from our custom writing service you will receive a perfectly written assignment on car sector in china. What we need from you is to provide us with your detailed paper instructions for our experienced writers to follow all of your specific writing requirements. Specify your order details, state the exact number of pages required and our custom writing professionals will deliver the best quality car sector in china paper right on time.
Our staff of freelance writers includes over 120 experts proficient in car sector in china, therefore you can rest assured that your assignment will be handled by only top rated specialists. Order your car sector in china paper at affordable prices!
The car sector within China automobile industry is taken as an infant
sector and, as such, it has always been subject to protection against
imports by means of the highest import tariff rate. On several
occasions in recent years, China has made readjustments to tariff
Help with essay on car sector in china
rates. The import duty has been reduced to 80% for complete cars with
a displacement of three liters or less and 100% for those with a
displacement of three liters or more. This is higher than for all
other imported industrial goods.
The tariff rates for car parts and accessories, however, are lower
than for complete cars 40-50% for engines, gear boxes, driving axles,
vibration reducers, clutches and breaks, % for tires, and 1-5% for
electronic devices used in cars. To encourage domestication of car
building, the state is practicing a string of preferential tariffs.
Entitled to these preferential tariffs are imported parts and
accessories by enterprises producing complete cars provided they meet
the domestication standards prescribed by the state.
Going hand-in-hand with protection by high tariff rates are non-tariff
restrictions on import of automobile products under the import quota
and licensing system. It is true that import quotas are playing a less
important role in restricting automobile import as domestically built
vehicles have become increasingly cheap and their prices on the
domestic market are now closer to international prices. Despite that,
a comparison between the marketing prices of imported goods and their
normal tax-included prices (prices that include the custom duty, VAT
and consumption tax on them) brings to light that the non-barrier duty
equivalents practiced under the quota systems will still be as high as
10%-0%. Restrictions by the quota system will be even more
significant on the import of medium- and high-class cars with a
displacement of liters or more.
Since the beginning of the 10s, the annual national automobile sales
has grown at an average rate of 14.5%, and corresponding rate of
increase is as high as 1% for sales of cars. In other countries and
regions, the number of automobiles in the population possession will
increase rapidly when the annual GDP of a country or region reaches
US$4,000 per capita (at purchasing power parity). By then, the
elasticity index of per capita possession of cars relative to economic
growth up will have risen from 1.7-1.8 to .6-.7. According to recent
studies (e.g. Maddison, 18; Ren, 17), China GDP, calculated at
purchasing power parity, is close to US$,000, suggesting that
beginning 004, the domestic demand for car will grow even more
rapidly than now. Our own computation indicates that by 010, cars
owned by the Chinese population will average 47 per 1,000 people, and
corresponding figure for automobiles will be 17 per 1,000 people. Both
figures will match those for Japan in the mid-160s and those for the
Republic of Korea and Taiwan in the 180s. Basing ourselves on this
computation, we are expecting a potential national demand for 5.8
million automobiles and million cars in 005, and 10 million
automobiles and no less than 4 million cars by 010.
In the first place, the domestic automobile market is isolated from
the international automobile market because of the high tariff rates
imposed by the state. And as a result, Chinese automobile enterprises
are almost free from the pressure of international competition. At
present, the domestic selling prices for imported cars that include
import custom duties, import-linked VAT and consumption tax are
.-.5 times their CIF (cost, insurance and freight). Besides,
automobile imports are subject to restrictions of import quotas,
import licensing and other non-tariff measures. As a result of so
great a protection against imports, cars imported through normal
channels are bound to suffer from limited competition capability in
light of the cost of production and selling prices for domestically
built cars. As a matter of fact, automobile imports have continuously
declined in recent years, to less than 40,000 vehicles in 18, and
imports of cars, to less than 0,000. The share of the Chinese market
was imported automobiles was 18.5% in 1 and, by 18, it had
dropped to .5%; and the share for imported cars, from 61.1% to .5%.
Moreover, deductions in tariff rates in recent years have failed to
push up imports. It is therefore clear that as long as China continues
to practice the current tariff rates and import quota system, cars
imported through normal channels will be no challenge to domestically
built cars. What also merits attention are the various protection
measures taken by local governments, which lead to partition of the
domestic market and inadequate competition between domestic producers.
The automobile industry does have certain barriers against entry
because of its scale economic feature. The state, on its part, has,
through policy measures, imposed restrictions on the number of
automobile projects to be started. All the factors cited above
invariably result in a market structure with a certain degree of
monopoly as a most striking feature. And finally, competition on the
domestic automobile market is also subject to state restrictions,
e.g., by valorizing automobiles to restrict price competition.
The 1 car manufacturers operating in 18 produced 510,000 vehicles
altogether averaging less than 40,000 by each. For the largest, the
Shanghai Volkswagen Automotive Company Ltd., the output was a mere
0,000. About 0 car manufacturers are operating in China, but
factories producing cars may number about 0, including some that are
not licensed for car manufacture.
Again the car sector. The sector has a total production capacity of
more than 1 million vehicles but the effective market demand is
computed at no more than 500,000. The volume of car sales, which is
limited, has become a serious handicap to car production, as it leads
to idle production capacity and excessively high fixed cost of
production apportioned to cars produced. Further deductions of tariff
rates on imported cars may cause prices to drop on the domestic
market. This, in turn, helps boost the market demand for cars. The end
result will be lower cost for domestic manufacture of car and greater
competitiveness of the domestic automobile industry.
The domestic automobile industry falls far below the best
international standards for batch quantity of production, prices of
products and technological level, hence its inability to take part in
international competition in an all-round way. The current protection,
however, can in no way help the industry achieve scale production,
enhance its efficiency, improve its technological level and reduce the
cost of its production and operation. Weak market demand and imperfect
competition are the main reason for problems the domestic automobile
industry faces low level of production concentration, limited size of
individual enterprises, low efficiency, inadequate competitive power,
etc. Because of this, a constantly expanding demand and increasing
competition are what the domestic automobile industry inevitably
requires in seeking development. China WTO entry will be conducive to
effort to expand the domestic automobile market and enhance the
domestic automobile industry competitive power. In view of this, the
government, while striving for entry of the global trade organization,
should make positive efforts to foster the market. That means
establishing a kind of highly efficient, pro-competition market
mechanisms, and using market means and competition to promote the
merger and re-organization of the existing car manufacturers. And in
the process, those technologically backward and poor in efficiency
will be eliminated and manufacturers in general will be forced to
improve their management and efficiency. In short, within the short
protection period allowed to China in the wake of its WTO entry, the
Government should see to it that the domestic automobile industry will
rapidly enhance its competitive power.
Please note that this sample paper on car sector in china is for your review only. In order to eliminate any of the plagiarism issues, it is highly recommended that you do not use it for you own writing purposes. In case you experience difficulties with writing a well structured and accurately composed paper on car sector in china, we are here to assist you. Your cheap custom college paper on car sector in china will be written from scratch, so you do not have to worry about its originality.
Order your authentic assignment and you will be amazed at how easy it is to complete a quality custom paper within the shortest time possible!