Shares of top Chinese manufacturing industries crashed on Wednesday, after capital city Beijing made public plans to phase out ownership limits to foreign shipbuilders, automakers and aircraft firms.
According to the National Development and Reform Commission (NDRC), China is set to terminate shareholding limits for new energy vehicle firms such as those that produce electric vehicles this year.
The move will be followed by commercial vehicles in 2020 and passenger cars in 2022.
China at the moment has limited foreign automobile firms to a maximum 50 percent ownership of joint ventures with local industries.
The fifth largest auto maker in China BAIC, has a joint venture with Mercedes Benz and also with South Korea's Hyundai, shrunk up to 13 percent in Hong Kong, while China auto maker Brilliance slumped almost nine percent.
The nation's biggest carmaker SAIC Motor Corporation, partner of Volkswagen and General Motors, dropped 2.45 percent by the break in Shanghai.
While the seventh biggest carmaker Geely, whose Chinese billionaire boss Li Shufu became the largest single shareholder of Mercedes-Benz maker Daimler in February, dived 4.46 percent in Hong Kong.
Guangzhou Automobile Group (GAC), which has joint ventures with Italian American carmaker Fiat Chrysler and Japan's Toyota, slumped 10 percent the daily limit in Shanghai before slightly recovering by the break.
It was down 8.77 percent in Shanghai and plunged nine percent in Hong Kong, where it is also listed.
GAC is China's number six car maker and it invested 1.2 billion yuan ($191 million) with a Chinese partner to build smart new energy cars last year.
The NDRC will also lift restrictions on foreign ownership of aircraft manufacturing firms this year, including those that make large-body commercial airliners, regional jets, helicopters and drones.
The news also weighed on aircraft and equipment makers.
AVIC Aircraft Co. slipped 0.80 percent in Shenzhen while AECC Aviation Power also lost 0.82 percent in Shanghai.
The NDRC revealed that the shipbuilding industry would this year scrap foreign ownership restrictions on firms designing, making and repairing vessels.
The news saw China State Shipbuilding Corp. fall 4.20 percent in Shanghai while China Shipbuilding Industry Co. gave up 1.11 percent.
