Auto imports are expected to keep rising thanks to strong domestic demand, but Japanese-made cars are less enticing since China in June slapped a special 100 percent tariff on them, said Jia Xinguang, an analyst with the China National Automotive Industry Consulting and Development Corp.

The special duty is part of China's countermeasures against Japan's emergency tariffs on shiitake mushrooms, spring unions and tatami mat straws imported from China.

"The move will break the Japanese-made vehicles' dominance in the Chinese auto imports and provide other countries' automakers with a very good opportunity to take bigger market shares in China," Jia said.

Japanese-made vehicles accounted for half of China's total auto imports in past years.

Statistics from the China Trading Centre for Automobile Imports indicated China imported 39,000 vehicles during the first half of this year, up from 17,853 units in the same period of 2000

Fifty-six per cent of imports, totalling 30,000 units, from January to May this year came from Japan.

"Germany's automakers are expected to be the biggest beneficiary of the Chinese Government's action," said Pan Zushun, general manager of the trading centre. "Their exports to China could double in the second half of this year."

The number of vehicles imported from Germany stood at 4,252 units or 14 percent in the first five months.

"We are very optimistic about our business in China during the second half of this year," a spokeswoman of Audi China said.

Audi AG, a luxury arm of Germany's Volkswagen AG, exported more than 1,000 vehicles to China during the first half of this year, doubling from the same period last year, the spokeswoman said.

She said Audi AG would begin exporting Audi A4, TT and Quattro to China soon.

Pan said automakers from South Korea, which took a tiny proportion of China's auto imports earlier this year, will also boost exports in the second half of 2001.

More than 1.2 million domestically made vehicles also were sold in the first six months this year, an increase of 20.7 percent year-on-year, according to the China Association of Automobile Manufacturers.

Yet imports surged more on the strength of high domestic demand, reduced tariffs and a fall in the exchange rates of the Japanese yen and German mark against the US dollar during the period, Pan said.

Changes in the currency exchange rates lowered the average price of an imported auto by 16.7 percent year-on-year, Pan said.

China cut its tariffs on auto imports from 80-100 percent to 70-80 percent at the beginning of this year.

The tariffs will be reduced to 25 percent by mid-2006 after the nation's entry into the World Trade Organization, expected by year's end.

(China Daily 07/25/2001)