Abstract
This chapter examines the evolution of government–multinational corporation (MNC) relations in China’s automotive industry from the mid-1990s to the mid-2000s, and the ensuing changes in government–MNC relations that emerged henceforth in the automotive sector. The central argument is that, in China, the automotive industry witnessed dramatic changes in the governance pattern of government–MNCs relations that enabled more full use of the capital, technology and know-how of the leading foreign MNCs for the modernization of this sector. In turn, leading foreign automotive MNCs responded to these regulatory changes, and the rapid growth of China’s domestic auto market by making some of the largest ever investments in China. From a comparative perspective, the capital invested, and transfers of technology and know-how by the MNCs to China enabled Chinese domestic automotive corporations to absorb leading-edge global practices and technology more rapidly than in other large developing countries such as India.
This is a preview of subscription content, log in via an institution to check access.
Notes
- 1.
It should be noted that the reality of the Indian auto market as one of the largest markets worldwide for lower cost, small cars is another key factor for the limited capacity for large car manufacturing in the country.
- 2.
Author’s interview of Stefan Messmann.
- 3.
On post-Fordist innovations see Bernard (2000).
- 4.
Zhongguqichebao [China Automotive News], January 4, 1990, p. 3.
- 5.
Stefan Messmann was also the former head of VW’s China/Asia operations during the late 1980s.
- 6.
Correspondence from Stefan Messmann with the author, August 2008.
- 7.
For the details of the technology and know-how transfers in the FAW-VW deal, and the additional transfers from VW to FAW beyond the JV , that were associated with the deal, see Chin (2010: 149–150).
- 8.
He, Guangyuan, “Mingque mubiao wanshan zhanlue tuijin jixie qiche chanye de zhenxing [Clarify goals, improve strategy, invigorate the mechanical and automobile industry], Gongcheng jianshe yu sheji [Project construction and design], 3, 1993, pp. 2–5.
- 9.
- 10.
Author’s interview with NDRC automotive industry researcher, Beijing, January 2006.
- 11.
Author’s interview with a leading researcher at the Academy of Macroeconomic Research of the NDRC, Beijing, May 2006.
- 12.
Ibid.
- 13.
For details see (Chin 2010: 122) .
- 14.
Author’s interview with NDRC automotive industry researcher, Beijing, January 2006.
- 15.
Ibid.
- 16.
Ibid.
- 17.
Notes on the presentation by GM Executive Vice President Louis Hughes on “GM’s Strategic Plans in China and Developing Shanghai’s Automotive Industry”, November 2, 1997.
- 18.
Ibid.
- 19.
Author’s interview with Louis Hughes, September 2008.
- 20.
For the details see Chin (2010: 197–98).
- 21.
- 22.
- 23.
- 24.
- 25.
- 26.
- 27.
- 28.
- 29.
- 30.
References
Amsden, A. (1989). Asia’s next giant: South Korea and late industrialization. New York: Oxford University Press.
Bernard, M. (2000). Post-Fordism and global restructuring. In R. Stubbs & G. Underhill (Eds.), Political economy and the changing global order (pp. 152–162). Toronto: Oxford University Press.
Chang, H.-J. (1996). The political economy of industrial policy. London: Macmillan.
Chin, G. T. (2010). China’s automotive modernization: The party-state and multinational corporations. Basingstoke: Palgrave Macmillan.
Faison, S. (1998). GM opens Buick plant in Shanghai. The New York Times, 18, 1.
Gallagher, K. S. (2006). China shifts gears: Oil, pollution and development. Cambridge, MA: MIT Press.
He, G. (1993). Mingque mubiao wanshan zhanlue tuijin jixie qiche chanye de zhenxing [Clarify goals, improve strategy, and invigorate the mechanical and automobile industry]. Gongcheng jianshe yu sheji [Project construction and design], 3, 2–5.
Johnson, C. (1982). MITI and the Japanese miracle: The growth of industrial policy, 1925–1975. Stanford: Stanford University Press.
Katzenstein, P. J. (1985). Small states in world markets: Industrial policy in Europe. Ithaca: Cornell University Press.
Perkowski, J. (2008). Managing the dragon. New York: Crown Business.
Ray, S., & Miglani, S. (2016). Innovation (and Upgrading) in the Automobile Industry: The Case of India. ICRIER Working Paper No.320, May.
Thun, E. (2006). Changing lanes in China: Foreign direct investment, local governments, and auto sector development. Cambridge: Cambridge University Press.
Wade, R. (1990). Governing the market: Economic theory and the role of government in east Asian industrialization. Princeton: Princeton University Press.
Author information
Authors and Affiliations
Editor information
Editors and Affiliations
Additional information
This chapter was completed during a Visiting Fellowship at the Institute for Advanced Study in Humanities and Social Sciences at Zhejiang University, Hangzhou, China, in June 2016, with the kind support of Institute for Advanced Study in Humanities and Social Sciences (IAS) Executive Dean Zhu Tianbiao and Ms. Wu Qi. I thank Louis Hughes, Stefan Messnann, Rudy Schlais and researchers at China’s National Development and Reform Commission for their participant observations, and Loren Brandt, Ha-Joon Chang, Victor Falkenheim, B. Michael Frolic, Jeremy Paltiel, Louis Pauly, Margaret Pearson, Eric Thun, Robert Wade, Hongying Wang and Joseph Wong for their earlier comments. I thank Zhang Xiaoke and Zhu Tianbiao for their editorial suggestions. I thank Li Qingdong for the previous research support.
Rights and permissions
Copyright information
© 2018 The Author(s)
About this chapter
Cite this chapter
Chin, G.T. (2018). The Evolution of Government–MNC Relations in China: The Case of the Automotive Sector. In: Zhang, X., Zhu, T. (eds) Business, Government and Economic Institutions in China. International Political Economy Series. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-319-64486-8_3
Download citation
DOI: https://doi.org/10.1007/978-3-319-64486-8_3
Published:
Publisher Name: Palgrave Macmillan, Cham
Print ISBN: 978-3-319-64485-1
Online ISBN: 978-3-319-64486-8
eBook Packages: Political Science and International StudiesPolitical Science and International Studies (R0)