Developmental Strategies in a Global Economy: The Unexpected Emergence of China's Indigenous Auto Industry
Posted: 29 Mar 2010
Late industrializing nations confront the challenge of creating national champions under conditions of intense competition from industrialized countries, steep technological learning curves, a paucity of capital, and evolving regulations within the global trade regime. In China, the government's strategy has been to leverage the country's large domestic market to lure multinational automakers into joint ventures with state-owned automakers, in hopes that the Chinese 'Big Three' would absorb technology from their partners and eventually launch their own global brands. I argue that this joint venture policy has actually hampered the Chinese Big Three, and that the real beneficiaries of government policies have been smaller, independent Chinese automakers - such as Chery, Geely, Great Wall and BYD. Drawing from over six months of interviews and archival research, I explain how the emergence of China's indigenous auto industry has not been the outcome of targeted developmental policies, but rather the unexpected outcome of China's entry into the World Trade Organization, increased access to international capital markets, and the globalization of auto production networks.
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