China remains the fastest growing new car market in the world, even during difficult times, but has been slow to grow in motorsport and tuning. The reasons are complex. Growth in car sales began only a decade ago – so is VERY recent and closely controlled by the authorities. Amazingly to Western eyes, no modification of any kind has been allowed – not even changing the colour of the car! This stifled the development of sporting or tuning modifications until now.
A few months ago, China’s National Government changed their laws, which will open up new opportunities for MIA members who wish to sell into this huge, and rapidly growing market. These new laws allows over 500 new product categories to be freely on sale and imported into China. This change has been as a result of high level lobbying at political levels, particularly by SEMA from the USA.
Amongst the very many motorsport products, of interest to MIA members, which are now included are racing fuels, race chassis, harnesses, safety belts, extinguishers, engines and transmissions, roll cages, race tyres, sensors, brake systems, radiators and oil coolers.
The MIA explains below details of this important new decision – these could well be of great value to explain to officials in China and Embassies where necessary.
Laws regarding the car modification market in China have been, for a long time, a grey area for two reasons
a) In China, as in many parts of the world, if something is not expressly and clearly officially allowed, then it is prohibited
b) The China National Road Safety Act (the original version of 2004 is below) includes a provision which prohibits most , and in some cases all , car customization.
Whilst the Chinese Government did not appear to enforce this law very firmly, SEMA, MIA and others felt that any overseas company selling “customization products or services” into the Chinese market would operate with a legal “cloud over them”. This would make firm business plans for this important market questionable and also vulnerable to problems at a later date.
SEMA presented a list of all known “specialty equipment” products and asked the Chinese Government to deregulate and “allow” those on the new 506 part list. Work continues as the Chinese Government is considering even more additional parts which may be added to this “explicitly allowed” list.
This new legislation/regulation covering the liberalization of modification to cars came into force in October 2008. It is covered as part of the “Order of the Ministry of Public Security (No.102)”. A translation of this Order is attached...see Section 2 to understand how this affects the user.
Any individual who chooses to install a “specialty product” shown on the latest list of 506 products must notify (importantly note, not seek approval from) the Government within 10 days of the installation of the product.
Relevant excerpts from the 2004 Road Traffic Safety Law in China relating to the modification of vehicles,
which appear to affect the specialty and performance motorsport industry
(Unofficial English translation)
The Law of the People’s Republic of China on Road Traffic Safety, adopted at the fifth meeting of the Standing Committee of the Tenth Na¬tional People’s Congress of the People’s Republic of China on October 28, 2003, and which took effect on May 1, 2004, states the following:
Article 5 - The Department for Public Security under the State Council shall be in charge of the administrative work for road traffic safety nationwide. The Traffic Control Department of the Public Security organs, under the local people’s governments at or above the county level, shall be in charge of the administrative work for road traffic safety within their respective administrative areas.
Article 16 - No units or individuals shall do the following:
(1) Assemble motor vehicles or alter the registered composition, structure or features of motor vehicles without authorization;
(2) Change the models of motor vehicles, their engine number, chassis number or the identification code of the vehicles;
Paragraph 3 - Where a unit manufactures or sells models of motor vehicles, without permission by the Government Department in charge of motor vehicle products, those finished motor vehicles and the spare parts illegally manufactured and sold shall be confis¬cated. It shall, in addition, be fined not less than three times but not more than five times the value of the unlawful products; if it has a business license, the administrative department for industry and commerce shall revoke the license; and if it has no business license, it shall be closed down.
Paragraph 4 - Where self-assembled motor vehicles are turned out or sold, or motor vehicles refitted without authorization are turned out or sold, a punishment shall be imposed in accordance with the provisions of the third paragraph of this Article.
To read the complete Order of the Ministry of Public Security, click here.
To read the list of deregulated products, click here.