The Chinese government is giving consideration to removing the ownership stake caps that it imposes on foreign automakers that partner with local companies.
Since 1994, manufacturers have been required to enter into partnerships with domestic firms in order to operate within China. As part of that mandate, outside interests are limited to a 50 percent ownership stake in the joint venture.
Proponents of removing the cap argue that allowing foreign companies to take a controlling interest in their operations would promote competition and benefit consumers. Organizations that oppose removing the caps include the China Association of Automobile Manufacturers, which contends that allowing foreign automakers to gain a greater level of independence would be detrimental to Chinese brands.
The market share for Chinese-branded vehicles increased in 2015 for the first time in five years on increased demand for inexpensive sport utility vehicles.