Exhibit 99.2

                         CHINA AUTOMOTIVE SYSTEMS, INC.

                             AUDIT COMMITTEE CHARTER

PURPOSE

         The  Audit  Committee  shall  assist  the  Board  of  Directors  in its
oversight of (1) the integrity of the Corporation's financial statements and its
financial  reporting  and  disclosure  practices,   (2)  the  soundness  of  the
Corporation's  systems of internal  controls  regarding  finance and  accounting
compliance,  (3)  the  independence  and  qualifications  of  the  Corporation's
independent  auditors,  (4) the performance of the Corporation's  internal audit
function and its independent auditors, and (5) the Corporation's compliance with
legal and regulatory requirements and the soundness of the Corporation's ethical
and environmental  compliance programs.  The Audit Committee is also responsible
for  preparing  the report  required to be included in the  Corporation's  proxy
statement.

MEMBERSHIP

         The Audit  Committee  shall  consist of at least three  Directors.  The
members  of the  Audit  Committee  shall  meet the  independence  and  expertise
requirements set forth by the Securities and Exchange Commission.

         No member of the Audit  Committee  may serve on the audit  committee of
more than three public  companies,  including the Corporation,  unless the Board
(1) determines  that such  simultaneous  service would not impair the ability of
the member to  effectively  serve on the Audit  Committee and (2) discloses this
determination in the Corporation's proxy statement.

         The members of the Audit Committee shall be appointed at least annually
by the Board,  with one of the  members  appointed  as  Committee  Chair.  Audit
Committee members may be replaced by the Board.

RESPONSIBILITIES

In performing its oversight responsibilities, the Audit Committee shall:

Financial Statement and Disclosure Matters

1.   Review  and  discuss  the  Corporation's  quarterly  financial  statements,
     including  disclosures  made in  "Management's  Discussion  and Analysis of
     Financial  Condition and Results of  Operations",  with  management and the
     independent  auditors  prior to the filing of the  Corporation's  quarterly
     report on Form 10-Q,  including a discussion with the independent  auditors
     of the matters required to be discussed by Statement of Auditing  Standards
     No. 61 ("SAS No. 61"), as amended.

<PAGE>

2.   Review and discuss the Corporation's annual financial statements, including
     disclosures  made in  "Management's  Discussion  and  Analysis of Financial
     Condition and Results of  Operations",  with management and the independent
     auditors  prior to the filing of the  Corporation's  annual  report on Form
     10-K,  including a discussion with the independent  auditors of the matters
     required to be discussed by SAS No. 61, as amended.

3.   Discuss with management the  Corporation's  earnings press releases (paying
     particular  attention to the use of any "pro forma" or "adjusted"  non-GAAP
     information),  as well as the nature of financial  information and earnings
     guidance  provided to securities  analysts and rating  agencies.  The Audit
     Committee's discussion in this regard may be general in nature and need not
     take place in advance of each instance in which the Corporation may provide
     financial information or earnings guidance.

4.   Discuss with  management the  Corporation's  major financial risk exposures
     and the steps  management has taken to monitor and control such  exposures,
     including the Corporation's risk assessment and risk management policies.

5.   Review,  with  management,   the  internal  auditors  and  the  independent
     auditors,  major  issues  regarding  accounting  principles  and  financial
     statement   presentations,   including  any  significant   changes  in  the
     Corporation's selection or application of accounting principles,  and major
     issues as to the adequacy of the  Corporation's  internal  controls and any
     special audit steps adopted in light of material control  deficiencies.  In
     this regard,  the Audit Committee should obtain and discuss with management
     and the independent  auditors  reports and analyses from management and the
     independent auditors  concerning:  (a) all critical accounting policies and
     practices  to  be  used  by  the  Corporation,  (b)  significant  financial
     reporting  issues and judgments made in connection  with the preparation of
     the financial statements, including all alternative treatments of financial
     information within generally accepted  accounting  principles ("GAAP") that
     have been discussed with  management,  the  ramifications of the use of the
     alternative disclosures and treatments,  and the treatment preferred by the
     independent  auditors,  and (c) any other material  written  communications
     between the independent auditors and management.

6.   Review  with the  independent  auditors  (a) any  audit  problems  or other
     difficulties encountered during the course of the audit process,  including
     any  restrictions on the scope of the independent  auditors'  activities or
     access to  required  information  and any  significant  disagreements  with
     management and (b) management's response to such matters.

7.   Resolve any disagreements  between management and the independent  auditors
     regarding financial reporting.

8.   Review periodically the effect of regulatory and accounting initiatives, as
     well as off-balance  sheet structures,  on the financial  statements of the
     Corporation.

Oversight of the Corporation's Relationship with its Independent Auditors

9.   Appoint or replace the  Corporation's  independent  auditors  (subject,  if
     applicable to  stockholder  ratification),  and approve all fees payable to
     the independent auditors. The independent auditors shall report directly to
     the Audit Committee.

<PAGE>

10.  Approve,  in  advance,  all  audit  services,  and all  non-audit  services
     provided  by  the   Corporation's   independent   auditors   that  are  not
     specifically  prohibited under the  Sarbanes-Oxley  Act. Non-audit services
     need not be approved  in advance  only if (a) the  aggregate  amount of all
     such  non-audit  services  are not more than 5% of all amounts  paid to the
     independent  auditors  during the fiscal year, (b) they were not recognized
     to be  non-audit  services at the time of the  engagement  and (c) they are
     promptly brought to the attention of the Audit Committee and approved prior
     to the  completion of the audit.  The  Committee may delegate  pre-approval
     authority to one or more members of the  Committee,  but all such decisions
     must be presented to the full  Committee  at its next  regularly  scheduled
     meeting.

11.  Review, at least annually, the qualifications, performance and independence
     of the independent auditors.  In conducting its review and evaluation,  the
     Committee should:

     a.   Obtain and review a report by the Corporation's  independent  auditors
          describing:   (i)  the  auditing   firm's   internal   quality-control
          procedures;  (ii)  any  material  issues  raised  by the  most  recent
          internal quality-control review, or peer review, of the auditing firm,
          or by any inquiry or  investigation  by  governmental  or professional
          authorities,  within the preceding five years,  respecting one or more
          independent  audits  carried out by the auditing  firm,  and any steps
          taken to deal  with any  such  issues;  and  (iii)  all  relationships
          between the independent auditors and the Corporation;

     b.   Review and evaluate the lead audit partner;

     c.   Assure the  rotation of the lead audit  partner and the audit  partner
          responsible  for  reviewing  the audit as required by law; d.  Discuss
          with the independent auditors any disclosed  relationships or services
          that may impact the  objectivity  and  independence of the independent
          auditors;

     e.   Consider whether, in order to assure continuing auditor  independence,
          there should be regular rotation of the audit firm itself;

     f.   Take into account the  opinions of  management  and the  Corporation's
          internal auditors;

     g.   Present its conclusions  with respect to the  independent  auditors to
          the Board and, if necessary, recommend that the Board take appropriate
          action  to  satisfy  itself  of the  qualifications,  performance  and
          independence of the independent auditors.

12.  Set  clear  hiring  policies  for  employees  or  former  employees  of the
     independent auditors. At a minimum,  these policies should provide that any
     registered  public  accounting  firm may not provide audit  services to the
     Corporation if the CEO,  controller,  CFO, chief accounting  officer or any
     person serving in an equivalent  capacity for the  Corporation was employed
     by such  accounting  firm and  participated in the audit of the Corporation
     within one year of the initiation of the current audit.

<PAGE>

Oversight of the Corporation's Internal Audit Function

13.  Review the scope and effectiveness of internal auditing activities.

14.  Review and discuss  with the  independent  auditors  the  responsibilities,
     budget and staffing of the Corporation's internal audit function.

Compliance Oversight

15.  Review, with the Corporation's general counsel, any legal matter that could
     have a significant impact on the Corporation's financial statements.

16.  Annually review the Corporation's compliance program for its Code of Ethics
     and  Conduct  and the  results of  internal  audit's  review of the expense
     accounts of the Corporation's elected officers.

17.  Annually review the status of the  Corporation's  environmental  compliance
     program.

18.  Establish  procedures  for (a) the  receipt,  retention  and  treatment  of
     complaints  received  by the  Corporation  regarding  accounting,  internal
     accounting controls or auditing matters and (b) the confidential, anonymous
     submission  by  employees  of  the   Corporation   of  concerns   regarding
     questionable accounting or auditing matters.

MEETINGS; OPERATIONAL MATTERS AND REPORTS

The Audit Committee shall meet at least four times annually,  or more frequently
as circumstances dictate.

The Audit Committee is to meet periodically in separate  executive sessions with
each of  management,  the  Corporation's  independent  auditors and its internal
auditor.

The Audit  Committee  may form and  delegate  authority  to  subcommittees  when
appropriate.

In connection  with its duties and  responsibilities,  the Audit Committee shall
have the  authority  to retain  outside  legal,  accounting  or other  advisors,
including the authority to approve the fees payable by the  Corporation  to such
advisors and other retention terms.

The Audit  Committee  shall annually review its  performance.  In addition,  the
Audit Committee shall review and reassess the adequacy of this Charter  annually
and recommend to the Board any changes it considers necessary or advisable.

The Audit Committee shall report regularly to the Board,  including with respect
to any issues  that  arise with  respect  to the  quality  or  integrity  of the
Corporation's financial statements,  the Corporation's  compliance with legal or
regulatory  requirements,  the performance and independence of the Corporation's
independent auditors or the performance of the internal audit function.

<PAGE>

LIMITATION OF AUDIT COMMITTEE'S ROLE

The Audit  Committee's  role is one of oversight.  Management is responsible for
preparing the Corporation's  financial statements,  and the independent auditors
are  responsible  for  auditing  those  financial   statements.   Management  is
responsible  for the  fair  presentation  of the  information  set  forth in the
financial  statements  in  conformity  with  GAAP.  The  independent   auditors'
responsibility  is to provide their  opinion,  based on their  audits,  that the
financial  statements fairly present,  in all material  respects,  the financial
position,  results of operations and cash flows of the Corporation in conformity
with GAAP.  While the Audit  Committee has the  responsibilities  and powers set
forth in this  Charter,  it is not the duty of the  Audit  Committee  to plan or
conduct audits or to determine that the Corporation's  financial  statements and
disclosures are complete and accurate and are in conformity with GAAP.  Further,
it is not the duty of the Audit  Committee to assure  compliance with applicable
laws and  regulations,  the  Corporation's  Code of Ethics  and  Conduct  or its
environmental compliance program.