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China announces timeline to open automobile industry to foreign ownership

China  has announced proposals to remove its limit on foreign ownership of automotive ventures by 2022, reports Reuters.

China imposed foreign ownership restrictions in 1994, limiting foreign carmakers to owning no more than a 50 percent share of any local venture. A decision that was designed allow its local automotive industry to compete and develop.

On Tuesday, China’s state planner said it would remove foreign ownership caps for companies making fully electric and hybrid vehicles in 2018, and for the wider car market by 2022.

The German Economy Ministry on Tuesday welcomed China’s decision.

“This is a signal in the right direction. Now it will depend on whether actions follow words, and if so how the regulations will be shaped,” said the ministry in a statement. 

The Chinese announcement comes as tension deepen between the US and China over heightening trade tariffs.