China has decided to license auto exports next year to prevent domestic car makers getting into cutthroat competition and to weed out companies that cannot make the grade, Xinhua learned in Beijing on Saturday.

The Ministry of Commerce did not provide details of the license quotas or the qualifications required.

According to the 2007 Catalogue for Export License Management, no company will be able to export automobiles, full sets of car spare parts or car chassis without prior authorization.

Automobiles are a new item on China's export license management catalogue which covers products like live poultry, farm produce and mineral and energy resources like coal and crude oil.

Licensing of automobile exports will start on March 1.

The revision of the catalogue comes just days after the National Development and Reform Commission, the top policy setter, raised the threshold for investment in new auto projects to curb emerging overcapacity.

The country's production capacity reached 8 million units in July 2005, and is expected to hit 10 million in 2007. But demand was only 71.5 percent of capacity in 2005.

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