China seeking to protect local car companies

China is considering implementing a new policy which will protect local car manufacturers from foreign competition. The policy, which would ensure that cars made by Chinese-owned firms command half the market by 2010, is an apparent breach of the trade practices agreed to by the Chinese government upon entering the WTO, according to a report published by Reuters.
The policy, presently in draft form, also threatens to restrict the assembly of cars with shipped-in parts. Such assembly operations are routine throughout China. Industry analysts say the policy is intended to primarily help large China-based car companies, such as Shanghai Automotive Industry, develop and build their own cars. Volkswagen, General Motors, Honda and Ford Motor Company are the dominant car manufacturers in China.