Abstract
This chapter traces the emergence, expansion and diversification of the automotive industry in China through the lens of changing industrial policy priorities, exploring the implications for innovation and employment relations. Limitations of a joint-venture-centred model in developing domestic brands and NEVs have induced recent policy shifts in favour of private domestic manufacturers, increasing the pressure on global OEMs to innovate. At the same time, and despite increasing labour cost, employment relations continue to be characterised by segmented labour markets, precarious employment and conflicts. While China’s push for NEV development has ripple effects on global markets and the innovative capacity of the industry as a whole, a break with established labour practices is unlikely.
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Notes
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Among the entrants in the late 1990s and early 2000s were GM (1997); Honda (1998); Kia (1999); Fiat (1999); Toyota (2000); Ford/Mazda (2001); Hyundai (2002); Peugeot (re-entered 2003); Nissan (2003); Honda (2003); BMW (2003); DaimlerChrysler (2004); and Renault (2004, after a failed joint venture founded in 1993).
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Despite the drop in prices, an adapted version of the original Santana was produced until 2010.
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Profits climbed up to nearly 9% in 2011, with a small slump during the 2008 crisis (Zhang 2014: 37).
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VW Annual Reports 2012, 2013.
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This has been attributed to the conservative nature of SOEs and the reluctance of foreign OEMs to share state-of-the-art knowledge and technology with their Chinese partners (C. W. Chang 2011).
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Chang (2011) is therefore keen to emphasise that the indigenous brands did develop not as a result of central policymaking, but on the contrary, despite central planners’ preference for SOE JVs.
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Nationwide, there were 214,000 public and 232,000 private charging stations in 2017 (Babones 2018).
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Butollo and Lüthje (2017) have pointed out that MiC 2025 is effectively more about robotization, automation and a broader restructuring of industrial supply chains than about innovations in cyber-physical systems envisioned in the often compared agendas of other nations, such as Germany’s Industrie 4.0.
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As a condition to its opening of a new assembly site in South China, Volkswagen was, for example, required to develop an electric vehicle for sale in China. It, however, only produced a prototype that was never intended for serial production (Xu 2011).
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By now this is likely to have undergone significant changes, both due to increased pressure on productivity and the MiC 2025 agenda that specifically aims at the increasing robotisation of manufacturing processes.
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It is worth noting that between 2014 and 2016, employment numbers have shrunk from 250,000 employees in SOEs to 244,000; and from 19,000 to 14,000 in collectively owned enterprises. Meanwhile, employment in “other” units, that is, mainly private firms, has grown from 3.07 million to 3.15 million employees (China Labour Statistical Yearbook various). This reflects the broader sectoral reorientation away from SOE dominance to the rise of privately owned players.
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Here, my observations differ slightly from what Jürgens and Krzywdzinski (2015) have argued for a German JV, namely, that it delivers extensive polyvalent skilling as a requirement of lean production systems.
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In the absence of official statistics, this is based on anecdotal evidence and confirmation by Chinese trade union officials (Wenten 2016).
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Wenten, F. (2020). The Automotive Industry in China: Past and Present. In: Covarrubias V., A., Ramírez Perez, S.M. (eds) New Frontiers of the Automobile Industry. Palgrave Studies of Internationalization in Emerging Markets. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-030-18881-8_11
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