China eases restrictions on foreign investment as soon as possible and lowers car import tax Tesla’s stock price rises

According to foreign media reports, Xi Jinping made a speech at the opening ceremony of the 2018 annual meeting of the Boao Forum for Asia. The following two major issues have caused concern in the industry: 1. China will need to liberalize foreign investment shares as soon as possible, especially in the automotive industry; China will reduce automobile import tariffs considerably.

The release of the news made Tesla's investors happy, because in the pre-market trading yesterday (April 10, 2018), Tesla's share price rose by more than 4%.

Tesla CEO Elon Musk once interacted with Trump on Twitter and talked about Tesla’s current 25% import tax in China, stating that the power of China's trade protectionism laws is too strong. Limiting the percentage of shares held by foreign car companies against Chinese car companies, it is strictly forbidden to exceed 50%.

The Trump administration team then issued a decree expressing that it planned to levy an import tariff of US$50 billion on Chinese goods, which involved cars. Two days later, the Chinese government counterattacked and included electric vehicles in the list of products subject to new tariffs. Tesla’s share price plummeted, but it soon recovered.

Fortunately, Tesla’s share price has rebounded after Xi’s announcement at the Boao Forum for Asia that China’s economy will be open to the world and “significantly” import tariffs on cars.

Musk made the following description of Xi Jinping’s speech on Twitter: China’s move has very important significance, avoiding the US-China trade war and benefiting all parties.

Xi Jinping also briefed on intellectual property rights and foreign investment matters, and encouraged foreign car companies to cooperate with Chinese companies to build factories in China.

Despite the impact of import tariffs, Tesla’s sales in China have been performing well. Last year’s sales doubled to more than US$2 billion. (This article is taken from electrek.co)