By Kelly Sims Gallagher
Chinese language construction of cars rose from 42,000 automobiles in line with yr in 1990 to 2.3 million in 2004; the variety of passenger autos at the highway doubled each and a part years during the Nineties and maintains to develop. In China Shifts Gears, Kelly Sims Gallagher identifies an exceptional chance for China to "shift gears" and keep away from the standard difficulties linked to the car industry--including city pollution as a result of tailpipe emissions, greenhouse gasoline emissions, and excessive dependence on oil imports--while spurring fiscal improvement. this alteration will in simple terms happen if the chinese language govt performs a management function in development household technological ability and pushing overseas automakers to move purifier and extra energy-efficient applied sciences to China. If each new vehicle offered in China had the cleanest and such a lot energy-efficient of the automobile applied sciences already on hand, city pollution will be minimized, emissions of climate-altering greenhouse gases will be under projected, and the chinese language car may proceed to flourish and give a contribution to China's regular fiscal improvement. yet thus far, Gallagher unearths, the chance to shift gears has been missed.Gallagher seems to be intimately at 3 U.S.-Chinese joint ventures: Beijing Jeep, Shanghai GM, and Chang'An Ford. those case stories are dependent on unique study, together with interviews with ninety executive officers, undefined representatives, and specialists in either nations. Drawing from the case stories, Gallagher explores the bigger problems with the environmental and fiscal results of expertise move within the motor vehicle and the coverage implications of "leapfrogging" to extra complex know-how.
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Additional info for China Shifts Gears: Automakers, Oil, Pollution, and Development (Urban and Industrial Environments)
The European Union also negotiated a concession agreement with specific provisions for the automobile industry, namely, that foreign 26 Chapter 3 investors would be allowed to have a majority share in engine jointventure manufacturing operations, and that joint ventures would be allowed to change the production mix without government approval. In the past, the government restricted the number of models that a given company was allowed to produce (Ali et al. 2005). The Effect of the WTO Most of the Sino-foreign joint ventures frantically spent the early years of the twenty-first century trying to improve the quality and price of their cars while there was still some government protection left.
Consolidation. The new policy sought to consolidate the dozens of automobile companies into a few powerhouse firms akin to the “Big Three” model in the United States. More precisely, the Chinese government was striving for a “Big Three, Mini Three” (San Da, San Xiao— three big firms and three smaller firms) arrangement and it intended to focus most of its own energies and investment on those six companies. 2. Protectionism and technology transfer. The Chinese government also decided to protect all manufacturers located in China (including the joint ventures) from international competition by establishing import quotas and stiff tariffs (80–100 percent) on both vehicles and parts.
As noted, China officially permitted the private ownership of vehicles in 1984. These new requirements did not seem to deter the next foreign investors in China in the least. After the 1994 policy was issued, almost every big multinational automobile firm bid on a project to establish a joint venture with Shanghai Auto Industry Corporation, considered by many to be the best Chinese passenger-car firm. In the end, General Motors made the largest single foreign investment ever in China as of 1997 when it established its joint venture, as discussed in detail in the case study on Shanghai GM in chapter 6.