In recent developments, the head of the Ministry of Commerce emphasized during an interview with journalists: “When Chinese auto parts companies face anti-dumping actions from foreign entities, we must remain vigilant, enhance self-protection measures, and prevent the influx of dumped auto parts into China.†This statement reflects growing concerns over the increasing influence of foreign players in the domestic automotive supply chain.
**Foreign firms dominate the Chinese auto parts market**
Currently, more than 70% of the world’s top 100 auto parts suppliers have operations in China. Joint ventures and wholly-owned subsidiaries of multinational auto parts companies account for nearly 50% of the market share. Meanwhile, local Chinese auto parts manufacturers are often small-scale, fragmented, and highly competitive, leading to low overall efficiency. As China continues to lift restrictions on foreign ownership in joint ventures, a trend of "sole proprietorship" by foreign auto parts firms is accelerating. In just one year, companies like Deloitte, Mahle, and Bosch have established over 10 new production facilities in China, with over 90% being fully owned. Additionally, three foreign companies have set up R&D centers in China, each investing over 100 million yuan. These developments highlight the deepening presence of foreign firms in the sector.
Moreover, in Sino-foreign joint venture vehicle companies, Chinese partners often lack core technology and decision-making power. The procurement of components is frequently controlled by foreign entities, making it difficult for local manufacturers to access the complete vehicle market. As a result, foreign auto parts continue to hold a dominant position, intensifying competition and putting pressure on domestic companies.
**China’s key auto parts market remains heavily import-dependent**
According to the Ministry of Commerce, Chinese auto parts companies still struggle with strong supporting capabilities and limited innovation capacity. Most components produced domestically are low-tech and low-value. In the first quarter of this year alone, China imported $2.777 billion worth of auto parts—up 58.1% compared to the same period last year. These imports mostly consist of high-profit, high-value components, while exports tend to be low-margin, low-value goods. The Ministry has observed that certain critical components have seen a sharp rise in import volumes, with some foreign suppliers even lowering prices to gain market share.
While some Chinese companies can produce mid-range products, they lag significantly behind global standards in advanced automotive technologies. For instance, the mass-produced engines from Chinese auto parts firms are comparable to international models from the 1990s. In areas like advanced automotive electronics, China still faces major challenges. This technological gap means that many high-tech components must still be imported.
**Steps taken to safeguard industrial security**
Since 2002, the Ministry of Commerce has operated an early warning system for damage in the auto industry, which has played a crucial role in maintaining industrial safety. Through this mechanism, some component companies have become more aware of trade remedies such as anti-dumping measures and improved their operational management. Additionally, information platforms have been created to provide public data services and support industrial security planning.
However, the current monitoring scope is still limited, and expanding the industrial safety database has become a top priority this year. The enhanced database will allow for more in-depth analysis and better information services for businesses. If a component company believes that imported goods are causing harm due to dumping, it is advised to gather relevant data and promptly submit a complaint to the Ministry of Commerce.
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