The Effect of Globalization on the Chinese Auto Industry

1670 WordsJan 31, 20187 Pages
The effect of globalization on the Chinese auto industry can be explained in terms of increased foreign investments into the industry as well as the transfer of foreign technology into the industry. Foreign technology has affected the automobile sector development for long. However, its impact was more in the last decade. The rapidness of change in is a surprise given that China began production of cars with just 11 cars in 1963 (Lockstrom, Schadel, Moser and Harrison, 2011). After two decades, the production had not reached 10,000 passenger cars but by the end of 2002 (Chu, 2011), there were over one million cars manufactured and sold in the Chinese market. For the purpose of transforming significantly in this manner, China had to get the required technological capabilities and knowledge for the production of automobiles, beginning in the 1900 through to the 70s without any policy and with little infrastructure. 2.2.1 Prior to the World War II A significant condition for the success in the development of the economy for countries that industrialized later like China was the acquisition of the experience of manufacturing that was used before the World War II. Such experience gives numerous apparent gains for countries that are industrializing, building confidence among foreign investors in terms of gaining from their speculation (Chu, 2011). Before the Second World War, there were numerous manufacturing firms that had emerged along the east coast of China with greater
Open Document