Foreign Technology in China's Automobile Industry

Implications for Energy, Economic Development, and Environment

The China Environment Series is published by the Woodrow Wilson International Center for Scholars.

Abstract

Although there are still relatively few cars in China today, with the accession to the World Trade Organization demand for passenger cars is expected to grow substancially during the coming decades.  To tap into this expanding market and acquire more advanced technology, all the major Chinese auto manufacturers have established joint ventures with foreign companies.  This paper explores the role of foreign auto makers - particularly the big three (Ford, General Motor and DaimlerChrysler)- in transferring technology.  Although these foreign firms have help to modernize the automobiles on the road today, emissions control and fuel efficiency technology installed in cars is significantly behind European, Japanese, and U.S. levels.  Foreign firms and the Chinese government share this responsibility to correct this laggardness.