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What is globalization? And under the conditions of globalization, how has China’s auto industry developed?
At the recent Huadu Automobile Forum, Long Yongtu, who once led China’s WTO negotiations, gave an interesting perspective: In the coming years, there may only be five or six major global car manufacturers. If we can attract these top automakers to set up operations in China, that would be a victory for the Chinese auto industry. He argued that it's not necessary for us to create our own Chinese brands; this, in his view, would be a success for China’s automotive sector.
Long Yongtu emphasized that we don’t need to focus on building independent Chinese auto brands. He doesn’t believe in them and thinks it’s unnecessary to spend too much effort on this issue. But how do we evaluate his viewpoint?
His reasoning is that, after globalization, companies will no longer be defined by their national origins. There won’t be purely American or Japanese car companies anymore, and certainly not a completely Chinese brand. He also pointed out that the source of funding for enterprises becomes less important. Once China’s banks become large joint-venture institutions, it’s hard to tell which country’s investment is actually backing Chinese companies. Therefore, as long as a company creates jobs and pays taxes in China, it’s considered a good enterprise, regardless of where its capital comes from.
According to Long’s view, globalization requires dismantling China’s own auto industry. Then, would the Chinese auto industry just put its tools away and stop trying? Of course not.
First, according to Long, what is the Chinese auto industry still doing? Just focusing on attracting foreign investments. While it’s true that the international auto industry has a few dominant players, China is trying to challenge this structure—but it hasn’t been effective yet. However, lacking strength isn’t a reason to give up. On the contrary, it’s precisely because we’re not strong enough that we should work harder.
Why should the auto industry be open? During the WTO negotiations, we were told that opening up would help boost the competitiveness of China’s auto industry. But now, Long tells us to step back and let others take the lead. This raises a question: Did he really think this way from the beginning? If so, then this might explain why China’s auto industry remains weak and lacks backbone.
China’s current lack of strength doesn’t mean it will never have strength. According to Long’s logic, China can’t even dream of becoming strong. It’s like telling people not to try at all. Without ambition, how can a nation rise? But Long seems unable to see this. The Chinese auto industry isn’t empty-handed—there are always people who refuse to give up.
Moreover, the global auto industry structure isn’t fixed. South Korea managed to break through, proving that it’s possible to carve out a place for oneself.
He Guangyuan pointed out that for over 20 years, the Chinese auto industry has introduced advanced manufacturing technologies through joint ventures. However, the technical knowledge gained from these partnerships must be transformed into internal capabilities through learning and innovation. For the Chinese auto industry to compete globally, it needs both strategic vision and a spirit of innovation.
Long wants us to give up.
Second, what is a brand? A brand represents value and benefit. Many Chinese products fail to sell without price cuts due to a lack of brand recognition. As a former minister, Long should understand this.
Now, he suggests we abandon efforts to master core technologies through innovation in joint ventures. Even if a product is named “Cuihua,†it wouldn’t matter. But this approach ignores the importance of branding.
In the age of globalization, car production is indeed global. Car parts may come from different countries, but brands still carry national identity and have not disappeared—they’ve even strengthened. Even if we haven’t mastered core technologies yet, the brand itself holds value. Different brands represent different cultures and values. Why doesn’t Mercedes rename itself “Cuihua� Why doesn’t BMW become “Tiger Girl� Why not use “Great Wall†or “Forbidden City†as a logo?
Globalization is an opportunity for the Chinese auto industry—not a reason to surrender. Through globalization, we can collaborate with foreign companies to improve management, technology, and knowledge. With such a foundation, we can build our own capabilities and launch our own brands.
But Long wants us to give up our brand.
Third, regardless of whether bank loans are indistinguishable from their nationality after joining ventures, the issue of funding sources is significant.
Foreign investment in a company can be seen as neutral, as long as the money is invested. But the facts show that this isn’t always the case. For example, when CNOOC tried to acquire Unocal, the U.S. opposed it, not because of the money itself, but because it was Chinese money. They worried about the government’s involvement and potential threats to national security. This shows that even in a market economy, the origin of money matters.
According to Long, when China joined the WTO, there was no need to insist on a 50% joint-venture ratio, since the money is indistinguishable. But capitalism is more than just money—it’s about control and influence. We had a 50% stake, but did we really have power? By allowing foreign capital to dominate, we ended up being controlled. The only way to change this is to tell foreign investors: “You don’t know who your money belongs to. Why do you want to control us?â€
We can accept any investment, but we can’t let Long say that as long as they bring jobs and pay taxes, it’s fine. Employment and taxes are just small parts of the benefits that foreign capital brings. If we’re satisfied with this, we’ll remain at the bottom of the chain, always dependent on others. In the event of a divestment, our factories could be left in ruins.