Xinhua quoted an official with the country's top economic planner said China recent move to take finished automobiles off of a list of industries where foreign investment is encouraged will not affect the operations of existing Sino-foreign joint ventures in China auto sector.

The National Development and Reform Commission and the Ministry of Commerce jointly issued a new guideline for foreign investment last week moving finished car manufacturing from the encouraged list to the approved list.

An NDRC official explained that the move was the result of excesses in both production capacity and finished automobile companies in China.

The official with the NDRC department in charge of foreign investment, who declined to be named said "It was a normal adjustment in light of the development of China auto industry."

The official said "There is no such issue of tightening up, nor will it affect the operations of existing joint ventures in China."

China has been the world largest auto producer and market by volume since 2009. Its auto sales reached 18.06 million units in 2010 while output rose to 18.26 million units.

(Sourced from China Knowledge)