Globalization, Market Transition, and Variety of Developmental Models: a comparison of Four Automakers in the Chinese Car Industry

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Biography

Qiushi Feng was born in July 27, 1975. He got his bachelor degree in the major of social work from Jilin University in China (1994-1998). In August of 2002, he was admitted by the Sociology Department of Duke University. In August of 2004, he got a master degree of sociology at Duke. In April 2009, he got his PhD degree in the major of sociology at Duke.

Qiushi Feng’s major publications include an coauthored paper, “Social Network Types, Intimacy and Healthy Longevity among the Chinese Elderly” in Social Sciences in Health Care and Medicine edited by Frank Colobum and published in Nova Publisher; two co-authored books in Chinese, Entrepreneurship in the 21st Century published by Jilin People’s Press and Introduction of Social Statistics published by Jilin University Press. He recently translated the Sociology of the Economy edited by Frank Dobbin into Chinese, which has been published by Shanghai People’s Publishing House.

Qiushi Feng has won numerous fellowships and awards. The major ones include the Julian Price Endowed Dissertation Research Fellowship offered by the Graduate School of Duke University, the Summer Fieldwork Research Fellowship offered by the Asian/Pacific Studies Institute of Duke University, the PhD Student Fellowship offered by the Sociology Department of Duke University, Shide Academic Fellowship offered by the Shide Foundation in China, the Excellent Undergraduates Fellowship offered by Jilin University and the Outstanding Undergraduate Honor awarded by Jilin University.

Qiushi Feng is a member of American Sociological Association, Gerontological Society of America, North American Chinese Sociologists Association, and Chinese Sociological Association.

1 The term of “6+3” is always used to describe the current major automakers in the world, in which GM, Ford, DC, VW, Toyota, and Renault-Nissan as the six largest ones make up the “6”, while PSA, Honda and BMW are the “3”.

2 In fact, due to China’s opening to global investment in its automobile sector, the incoming foreign automakers definitely make up another group of actors, joining into the development of local car industries. However, the local car projects, in terms of the organizational ownership structure and technological strategy, are basically controlled by powerful domestic players, and foreign corporations are not a deterministic force. The last chapter will discuss in detail the role of the foreign automakers in the Chinese car industry.

3 SAIC Group has different names in history. To avoid unnecessary confusions, I uniformly call it Shanghai Automobile.

1 Asked by the central government, this model was later transferred to SAW built in Hubei in 1960s.

2 The production of Jiefang trucks in the CA10 family lasted until the year of 1986. By then, the total output had reached 1,281,502 vehicles.

3 The heavies and lights respectively refer to the heavy-sized and light-sized trucks.

4 The model refers to CA10 family as the major automobile product of FAW in the planned economy era.

5 A few responsibility systems may need to be elaborated. In the salary responsibility system, the total salary was fixed, regardless of the increase or decrease in the number of workers; In the loss responsibility system, the loss was fixed while reduction of loss would be rewarded by a certain ratio; For the extra-income responsibility system, the sub-organizations in FAW were allowed to take additional projects from outside if they had already accomplished the production goals set above, and 20% to 30% of the income from these extra projects could be maintained by these sub-organizations.

6 The central government established the CAIC to take over the duty of the Bureau of Automobile Industry in MMI in 1982, with a major purpose to improve the auto sector in a more concentrated structure.

7 According to the technological estimation of Hino in 1980, CA141 was technological higher by than FAW’s previous CA15, but lower than GD174, a truck model manufactured by Hino in 1980s (FAW 2003b).

8 In 1995, the Audi model, CSV6, was also introduced to this joint venture.

9 Such a decentralization process will be fully discussed in the chapter about Chery Auto.

1 The chapter discussing Geely Auto has a detailed account about Zhejiang’s active private economy,.

2 This institutional change will be fully discussed in the chapter about Chery Auto.

3 These four persons were the major municipal leaders at that time, Jiang Zeming, Zhu Rongji, Wu Bangguo and Huang Ju, all of whom later became the national top political leaders.

4 One main reason for the success of the Shanghai model in the prior-reform era was the comparatively excellent industrial conditions in Shanghai, especially the manufacture capacity in the automobile components. Before establishment of the new China, Shanghai had already developed the production of automobile components. In early 1950s, there were about 200 component makers in Shanghai, which produced one third of the national output; from 1954 to 1955, 767 automobile technicians were once transferred from Shanghai to Changchun in supporting the FAW construction, which became a significant part for the first generation technicians of FAW (CSAIH 1991). Another secret depended on the fact that unlike Hongqi specifically serving the top-ranked political leaders, the Shanghai model was designed as a common car for ordinary officials. Thus, this model could enjoy a more substantial and stable demand in the planned economy era.

5 Such a chance could be caught by Shanghai was also because in the early years of the reform, Chinese largest automakers such as FAW and SAW were all busy on restoring their truck production to serve the burgeoning demand from the economic revival; Thus, these automakers could not pay enough attentions on this project(Cheng 1995).

6 These subordinates could be categorized into two groups, the closely-associated ones and loosely-associated ones. For the latter, STAICC generally had no direct financial relationship, while for the former the enterprise finance was divided into two levels, the STAICC level and the subordinate level.

7 The chief Chinese negotiator, Jiang Tao, was a significant local official, later called as “the father of Santana”. As Jiang himself memorized (Ge 2007), in the six years of making the Shanghai-VW contract, he maintained the official position in the local government, though experiencing two shifts, transferring from the Shanghai First Bureau of Machinery and Electronics to the Shanghai Planning Committee and then to the Municipal Congress.

8 These shares were later purchased back by Shanghai Automobile.

1 In 1978, 81.4% of Anhui labor force was in the first industry, 10.2% in the second industry and 8.4% in the third industry (Gao 1986).

2 This first round of industrialization was done during the Great Leap Forward and Cultural Revolution, when Anhui was encouraged to develop local industrial projects under directions of the central government.

3 Even such a small investment might have been over-exaggerated (Lu 2003): by doing this, the local government attempted to increase its stakes in the future negotiation with the central government.

4 Since 2001, the directory regulation was replaced to a new announcement management. This critical policy change of the Chinese automobile industry is discussed in the last chapter.

5 In fact, the earlier built FAW-Yangtze in Wuhu was also supported by Gen.

6 DMC is a similar case as FAW.

1 The data below are either from the National Statistics Bureau or Zhejiang Statistics Bureau, unless specifically mentioned.

2 In fact, the ignorance of the central government on Zhejiang did not change at all after the reform: from 1978 to 1993, the investment per capita from the state-owned units in Zhejiang was only three fourth of the national average, ranking 22th across the country (Fang et al. 2000).

3 Tibet was not included in this statistics.

4 Yiwu was indeed a very representative case to illustrate the growth of private economy in Zhejiang. With the very active private economy, it grew up to a world-class market for small commodities in the thirty years after the reform.

5 “Feather for sugar” was a local characteristic business in Yiwu, which could be traced as early as Ming dynasty. In the agriculture spare time, Yiwu peasants carried the brown sugar, a local characteristic product, to other regions in exchange for feather of fowls. When they returned home, these feathers could be used as fertilizer.

6 Besides these machinery sectors, Taizhou had also developed other competitive industries. Since the mid-1990s, Taizhou became the national largest production base of the chemical raw material for medicine. And the local production of plastic products was also an advantaged sector, consuming one eighth of the plastic resin in China. The traditional light industries such as food industry and leather industry in fact still held a position in the local economy, though not dominant as before: the output of tangerine cans was one third of the world total and the simulated leather shoes ranked number one in China in terms of output and export.

7 The other two areas was Yiwu and Keqiao (a district of Shaoxing), which were the host places for the Yiwu small commodity market and the Shaoxing light industrial textile market.

8 In order to meet the requirement of this bus-specific permit, Li had to later transform his products into bus-like vehicles.

9 Li Shufu later managed to take back the 30% stock and completely held the permit.

10 In fact, Li’s “cries” were closely embedded within an emerging shift of the major policy paradigm in the Chinese automobile industry since late 1990s, which will be detailed in the last chapter.

11 Merrie was produced out in 2000 and Youliou came out in 2002. Because Geely did not get any production permit until 2001, Merrie and its former model Haoqing had to be designed as hatchback vehicles so that they could be not acknowledged as “cars”. However, with the permit issued, Youliou was designed as a sedan.

12 VVT is the abbreviation for variable valve timing, which is a newly developed technology of the automobile engine R&D in the world automobile industry.

13 At the very beginning of the reform when the political ideology supporting the market transition was not fully acknowledged, the private economy was often depressed by the local governments. Take Wenzhou as an example. In the early 1980s, when the local private economy just started to grow up, “eight kings”, namely eight most outstanding local private entrepreneurs, were put into jail by the local government because of “speculation and profiteering”. Their “crime” was purely political: “making such a big fortune means developing capitalism” (Gao 2008).

14 However, this does not mean all Zhejiang governments are exactly the traditional “liberal state” as a gatekeeper of the free market. In fact, some local governments always actively pushed the local economy through improving the market macro-environment. The growth of Yiwu as the world supermarket was a good instance to illustrate this type of local governments in Zhejiang.

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