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China adopts detailed measures for auto trade 
Last Updated(Beijing Time):2005-09-23 12:38
China is to increase standardization in its vehicle trade as the Ministry of Commerce issues a Policy on Auto Trade and more detailed measures are being adopted to help put the policy into practice. Industry insiders say the policy would lead the country's auto trade sectors to healthy development.

The car trade sector includes sales of new and used vehicles and parts, as well as the scrap business and vehicle recovery.

The recent Policy on Auto Trade issued by the Ministry of Commerce outlines the overall targets of the vehicle trade and clarifies the role of government management in the industry.

The new policy also attaches great importance to the protection of consumers' interests.

New measures that have been, or will be, detailed with the trading of second-hand cars, spare parts, and the recycling of discarded vehicles.

Vice President of China Machinery Industry Federation Zhang Xiaoyu points out that the policy provides systematic guidance for the development of China's auto trade sector.

"The Policy on Auto Trade will give the country's car industry great momentum. In a global context it enables China to fulfill its commitment to the Word Trade Organization by further opening up its car market. Meanwhile, the policy will help strengthen the competitiveness of China's auto industry and help it to better cater for the desires of domestic customers," said Zhang.

Statistics from the Ministry of Commerce show that last year China became the third largest car market in the world, with its sales volume standing at 5 million units. China now has around 27 million units of cars, up from 10 million units ten years ago. Of that total, more than half are owned by individuals.

The ministry has realised that with the rapid development of the auto industry in the country, the old policies on auto trade have failed to meet the demand of the new situation.

According to the regulations, overseas investors, who have advanced marketing and sales expertise as well as firm international sales networks, are to be encouraged to invest in the nation's auto trade sector.

The regulations also urge both foreign and domestic car manufacturers to establish a sound vehicle sales and after-sale service system by themselves or with their authorized dealers as soon as possible to protect customers' legal rights in the process of purchasing and using vehicles.

Economist Han Meng, who works in the Chinese Academy of Social Sciences, believes another important change buried in this policy is the loosening on the regulations on trade in second-hand cars.

"According to the policy, by optimistic forecasts the sales volume of second-hand cars will surpass that of the new ones in the near future. Along with the increase of used-car sales, auto renting, auction and ownership transfer will all be promoted. As a result, the whole auto industry is expected to be advanced," said Han. 

The policy will mean that the transaction procedure of second-hand cars will be simplified and the evaluation of the cars will be standardized.

At the moment, the trading volume of second-hand cars accounts for 30 percent of the total in China, far lower than that in developed countries. Economist Han Meng holds that the policy, which frees up the used car trade, will be beneficial to the market as well as helping to standardize and improve the auto trade sector in China.

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