Wally Edgar CHEVROLET Dealer -- CHINA'S Trade Group's Now Make Themselves Heard!!

Sept. 30, 2010 - PRLog -- SHANGHAI -- Industry associations in CHINA traditionally have toed the government's line, earning the bad reputation of being the nation's "second government."
But some of them have become increasingly independent; no longer are they afraid to disagree with the government.

This is especially true of the China Association of Automobile Manufacturers (CAAM), the China Machinery Industry Federation (CMIF), and the China Council for the Promotion of International Trade (CCPIT).
It is a big boon to the Chinese Auto Industry to have three trade groups that dare to stand up to the government.

At an industry forum in September, an official from the National Development and Reform Commission (NDRC) said the domestic auto industry is facing the grave risk of overcapacity.
He also said the government would "resolutely curb excess capacity in the auto industry."

As an economic planning agency, the NDRC makes policies for various domestic industries. It is widely seen as the most powerful body of China's central government.
But the official's assertion was quickly disputed by CAAM's secretary general, Dong Yang, and CMIF's executive vice chairman, Zhang Xiaoyu.

Dong said CAAM's own survey showed that none of the automakers in its organization faces any serious risk of overcapacity. He argued that it is normal for a market with annual growth of 20 percent to have a surplus capacity as high as 30 percent.
As if this were not enough, Dong later posted his opinion on CAAM's Web site - just to make sure that everyone read it.

Meanwhile, CMIF's Zhang pointed out that the government has underestimated market growth before. In 2006, for example, the government wrongly claimed that greedy automakers had built too many assembly plants.
Two weeks ago, Dong and Zhang drew rhetorical support from Wang Xia, chairman of CCPIT, which organizes the annual China auto show that rotates between Shanghai and Beijing.

At an industry event, Wang suggested that a little overcapacity does more good than harm to an industry. Without overcapacity, there wouldn't be competition, he noted.
At present, China's government is drafting its 12th five-year plan for the domestic auto industry, a document that will set policy from 2011 through 2015.

Thirty-two years after it began to reform its economic system, China is still is evolving from government control into a MARKET ECONOMY.
But the government still drafts industry policies without sufficiently consulting business executives.

That's why China's automakers need independent industry associations. Industry officials are most valuable when they speak without fear. The government should listen.

SOURCE:Auto News China
      Jian Yang

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