Limits to Leapfrogging in Energy Technologies? Evidence from the Chinese Automobile Industry

One of the most attractive notions in the field of sustainable energy development is the concept of energy-technology “leapfrogging”. Leapfrogging through international technology transfer can be especially problematic because often developing countries do not have the technological capabilities to produce or integrate the advanced energy technologies themselves. Until they have acquired the capabilities to produce the advanced technologies themselves, most late-industrializing countries buy their new technologies from industrialized countries, usually through licensing or joint-venture arrangements. Empirical case studies of the three main Sino-US passenger-car joint ventures reveal that until the late 1990s, little energy or environmental leapfrogging occurred in the Chinese automobile industry as the result of the introduction of US automotive technology. An improvement in Chinese capabilities and more stringent Chinese energy and environmental policies are needed to induce energy leapfrogging in the Chinese automobile industry. Foreign firms also have a social responsibility to contribute to China's sustainable industrial development. In order to realize the promise of the leapfrogging, the limits to leapfrogging must be identified and acknowledged so that strategies can be devised to surmount the barriers to the introduction of advanced energy technologies in developing countries.