Foreign direct investment in China's manufacturing industry

The biggest foreign direct investor in China's manufacturing industy in 2005 was Hong Kong where a lot of multinational firms are located, mostly because Hong Kong is one of China's special administrative regions due to Hong Kong's high degree of political and economic autonomy. In fact, Hong Kong enjoys the status of the freest economy in the world. The second foreign direct investor is Latin America followed by South Korea and other countries.
Source: China Statistical Yearbook (2005)

Foreign auto producers in China

Here is a graph showing the distribution of US, European and Japanese auto producers across location in Chinese manufacturing centres. As can be seen in the graph, Shanghai is the most popular manufacturing destination for US and Eurorean auto producers, followed by Jiangsu and Hubei. The most atractive destinations for Japanese auto producers are Jiangsu, where more than 70 producers are located, the next one is Guangdong followed by Shanghai and Tianjin.

Source: European Commission (2009)

Tariffs and China's trade

In 2001 China became the 143rd member of World Trade Organization (WTO). Since then, the country boosted trade liberalization in all sectors. Till the 1st of July 2006 tariffs on imported vehicles were in the range from 70 to 80 percent, which is a prohibitive level. When becoming the member of WTO, tariffs on imported vehicles, on average, dropped to 25 percent. After China became the member of WTO, import quotas and domestic content requirements were eliminated. In addition, now there are no restrictions on distribution and financing by foreign companies. Here is a link to the working paper published by the European Commission.