China said it will “withdraw support” for foreign investment in auto manufacturing

China said it will “withdraw support” for foreign investment in auto manufacturing to encourage domestic industry in the world’s largest car market.

Some of the world’s biggest car firms, including General Motors, Honda and Volkswagen, have long had operations in China, but the state news agency said Beijing would “withdraw support for foreign capital in auto manufacturing”.

The move, announced by the National Reform and Development Commission and the Ministry of Commerce, comes as auto sales slump and Beijing tries to shore up the domestic economy against a forecast slowdown.

The new obstacles to foreign auto makers, due to go into effect on January 30, come “because of the need of the healthy development of domestic auto making,” the NDRC and commerce ministry said, according to Xinhua.

The report did not provide specific details of what the withdrawal of support might amount to, nor were they immediately available from either organisation’s web site.

But the measure comes as China’s auto sales slow and just 10 days after Saab was forced into bankruptcy following successful efforts by GM to block Chinese companies from acquiring the Swedish car maker.

China, which overtook the United States to become the world’s top auto market in 2009, has become increasingly important for global players such as GM and Volkswagen.

The moves against the international auto sector come fast on the heels of Beijing’s decision earlier this month to hike tariffs on US passenger cars and sports utility vehicles with engine capacities of 2.5 litres or more.

China challenged the US to bring a complaint to the World Trade Organization.

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