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Stumbling Toward Capitalism: The State, Global Production Networks, and the Unexpected Emergence of China's Independent Auto Industry

  • Author(s): Chang, Crystal Whai-ku
  • Advisor(s): Zysman, John
  • et al.
Abstract

The auto industry has long been of interest to political scientists because of the crucial role the state has played in brokering investment into local firms and coordinating relationships between suppliers and assemblers. In Japan and Korea, a centralized and institutionalized policymaking apparatus is often credited with establishing a globally competitive domestic auto industry without the need for foreign direct investment (FDI). Yet in China, where the policymaking apparatus is fragmented and decentralized, FDI was the primary policy tool used to infuse capital, technology, and management expertise into the backwards state-owned auto sector. Despite the central government's staunch support of state-owned firms, the most globally competitive domestic automakers in China today are not the traditional state-owned firms, but a group of new domestic firms with no ties to the central government or foreign automakers.

Contrary to those scholars that credit the Chinese party-state with the modernization of China's auto industry, this dissertation argues that one of the sector's most significant developments - the emergence of independent Chinese automakers - was not the outcome of well-executed industrial policies, as was the case in Japan and Korea. Rather, the ability of China's independent automakers to overcome financial, technological, and regulatory barriers to entry was largely shaped by China's accession to the World Trade Organization, the economic initiative of local governments, and China's integration into an increasingly fragmented global automotive production networks. This dissertation also explores the consequences of China's new appetite for cars, such as growing oil imports and greenhouse gas emissions, and assesses the prospect of vehicle electrification as a way to solve the country's dire energy and environmental problems.

This research examines from a sectoral perspective the inherent limitations to China's fragmented and decentralized approach to policymaking. Though this approach has been one of the primary drivers of economic growth up to now, it will hinder not only necessary consolidation in the Chinese auto industry, but the next stage of China's economic transition.

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