8/14/2019 Standing at a Crossroads: 30 Years of Automobile Policy In

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STANDING AT A CROSSROADS: 30 YEARSOF AUTOMOBILE POLICY IN CHINA

Holger BungscheAssociate Professor

Institute for Industrial ResearchKwansei Gakuin University, Nishinomiya

JapanOutline of the paper:

With the 3rd Plenum of the 11th Congress of the Chinese Communist Party in December 1978,China began the process of modernizing its industries, its agriculture, its national defense as well as itsscience and technology sector (Four Modernizations). At latest since 1986, as the automobile industry

was declared a pillar industry, this industry stood at the center of Chinas efforts to catch up with andovertake the Western industrialized nations. The car industry should not only provide the blueprint formodernizing other industries too, but should lead Chinas economic and social development as a whole.

Although China in many ways chose a unique development approach, the East Asian forerunnercountries Japan and Korea clearly served as examples for China for transforming its backwardautomobile industry into a powerful global competitor. And although not entirely identical, manyphases of the development of China and Japan show quite remarkable points of resemblances. Forinstance, as China today, Japans car industry in the 1970s was, after years of double digit growth rates,suddenly confronted with an economic crisis (oil shock) and an accompanying overall criticism of theautomobile for its lack of safety and environmental friendliness. The Japanese automobile industry at

that time not only reacted appropriately towards this crisis, but even took advantage of it. At the end ofthis decade Japan was the technological leader in environmental friendly engine technologies and

Japans car industry was the largest in the world. It will be interesting to observe, whether China willalso be able to turn the adversary economic developments of the last months also into an advantage forthe development of its national car industry in the future.

The paper will in a first part compare the development and the development policies forfostering a national automobile industry of Japan in the 1960s and 1970s with China since 1978. In thesecond part it will address the recent reactions of China towards the economic crisis and its effects onits automobile industry. A short outlook will finally try to make some well considered guesses regardingthe question whether the crisis could indeed provide a chance for China to catch up with the developed

automobile nations and whether it could contribute to an accelerated development in China towardseconomic and ecological sustainability.

Relevance and Links to the GERPISA Program and the 2009 Conference:

The paper has especially relevance to the topics ofEmerging Automobile Industries and Markets, andSustainable Development. With respect to the thematic outline of the 2009 conference my paper wishes tocontribute especially to the topics Old and new Landscapes in the Automobile Industry and FinancialCrisis, Growth Model and Automobile Industry.

A first draft of the paper was presented at the 20th SASE (Society for the Advancement of Socio-economics) Conference held in Costa Rica in July 2008.