On December 15, the WTO Appellate Body issued a final ruling on the United States, the European Union, and Canada v. China auto parts import management measures. The ruling upheld the conclusion that the dispute resolution agency believed that China’s practices violated the WTO rules. China is here on this occasion. Lost in trade disputes. The sincerity of China's opening up of the auto market is obvious to all over the world. The import tariff of the whole vehicle exceeds 100% from the highest, and it has dropped to 25% in 2006, and the import tariffs for parts and components have dropped to 10%. On the one hand, China has completely fulfilled its WTO commitments; on the other hand, it is an indisputable fact that joint venture brands account for more than 70% of the Chinese market. Even so, some countries have persisted. China's measures aimed at combating tax evasion have been criticized as trade protectionist policies and eventually China has lost. It can be said that the decision of the WTO Appellate Body is obviously unfair to China and may bring about a series of adverse consequences. When the European and American markets were severely declining and many auto giants encountered difficulties, many multinational car companies publicly acknowledged that the Chinese market is the fastest growing market and the most profitable source of growth for them. When the Chinese market became the "life-saving straw" of some auto giants, its open sincerity has been questioned and unfairly treated. Openness and cooperation should be mutual, equal, and fair. In fact, when Chinese cars are to be exported to European and American markets, their high standards, strict audits, wide detection range, and complicated procedures have made China’s auto companies less of a problem. The number of auto exports overseas is not even comparable to the sales of multinational brands in the Chinese market. Then, on December 2, the anti-dumping bureau of the Ministry of Commerce and Industry of India stated that its domestic industry has applied for the initiation of anti-dumping investigations on “front girder bridges and steering knuckles†for heavy or medium-sized commercial vehicles from China; one day After that, the European Commission decided to impose an anti-dumping tax of up to 87% on carbon steel fastener products produced in China. The case will be officially approved by EU member states within one month. From April 1, 2005, China began to implement the "Administrative Measures for the Import of Auto Parts That Constitute the Characteristics of Complete Vehicles", which stipulates that if the imported auto parts and components constitute the characteristics of the whole vehicle, the tax rate shall be subject to the tariff of the whole vehicle and shall be adjusted from 10% to 25%. The characteristics of the vehicle as specified in the Measures include the assembly of imported fully-parts (CKD) or semi-parts (SKD) assembled vehicles; the imported body (including the cab) and the two engine assemblies; the sum of the prices of imported components. Achieve 60% or more of the total price of the vehicle. Although the verification standard for vehicle features began to take effect on July 1, 2006, the Ministry of Commerce emphasized that the "Measures" were issued to "prevent certain companies from importing a large number of parts to assemble vehicles and cause loss of China's customs duties", but in February 2005, the "Measures". Once it was promulgated, it was met with resistance from a number of multinational corporations, and some domestic joint ventures followed suit. The European and American countries began complaining to the WTO in 2006, claiming that China’s move in disguised form forced Chinese-foreign joint ventures or Chinese automakers to use Chinese-produced auto parts and components, and declared that foreign auto parts manufacturers would transfer production sites to China, leading to European and American correlations. Industrial workers are unemployed. This is nonsense, the United States Delphi, Germany Bosch, Japan Denso and other parts giants into China, which is not a happy and willing to come, in the Chinese market to open up the land, make a special profit? Assembling a car through CKD or SKD will inevitably cause damage to the automobile industry in the host country. This is the consensus of the industry. Zhou Shijun, executive director of the WTO Research Association, pointed out that if there are no restrictions on imported parts, Chinese companies will become pure importers of spare parts and then become pure assembly bases for foreign auto manufacturers. This will seriously hinder the autonomy of Chinese companies. Innovation and development. The loss of China’s case may have a series of adverse consequences. First, the import of parts and components that make up the characteristics of the entire vehicle may increase rapidly. Some companies may bypass the policy and openly evade the tariff. Secondly, the winds of CKD and SKD may again spread, seriously impacting the domestic auto industry and suppressing the living space of domestic auto manufacturers and component manufacturers. Third, some high-end models are expected to further reduce prices, impact the domestic market, and suppress the upgrade efforts of independent brands. Independent brands may not always build low-end vehicles. When independent brands work toward high-end, there is a very cheap KD. The car is waiting. Fourth, some joint ventures can easily produce new cars, their desire for “independent†efforts will be further reduced, and China’s desire to open up the market for technology will further fall. Fifth, it is not conducive to the growth of local parts and components companies. It may be rejected by the joint venture brand procurement system, and technological upgrading will further slow down. Sixth, there are currently some views that except for the localization of BMW and Mercedes-Benz, the loss of the lawsuit will have little impact on other brands. Such views are somewhat partial. Looking at the new car production plan of the joint venture company in 2009, we will know that a large number of new models, including mid-to-high-end models, will enter China. Originally affected by this policy, some companies may have to spend some time to put into production high-end models in China. Or to pay a higher price, once there is no such "constraint", the pace of production will be greatly accelerated. Seventh, domestic consumers prefer the so-called “original importâ€. In the future, some companies can play this card, which will not only impact their own brands, but will even affect other joint ventures that are trying to increase the localization rate. Eighth, the Chinese government will not rule out new measures and the game will continue. In short, the loss of China’s lawsuit in this case has been harmful to the Chinese auto industry.
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