Power is not just a slogan Chinese auto industry needs to be independent in opening up

After one year of the “He Long Debate” that has attracted much attention from the automotive industry, relevant officials of the national authorities of the automobile industry finally broke their silence. At a car forum recently held in Tianjin, they publicly expressed their interest in using foreign capital. Views on major issues such as independent development.

China's auto industry uses foreign capital is carefully considered

On September 16, Chen Bin, deputy director of the Industrial Development Department of the National Development and Reform Commission, and Wang Fuchang, deputy director of the Industrial Policy Research Department, also attended a car forum in Tianjin and delivered speeches respectively.

Chen Bin first emphasized that: In 1994, the state clearly stated in the automobile industry policy for the first time that the use of foreign capital to encourage the use of foreign investment in the development of China’s auto industry was a matter of careful consideration.

Of course, Chen Bin’s explanation cannot be separated from the historical background at that time. According to him, at the time of drafting that industrial policy, the organizers specifically invited experts from domestic large-scale research institutes and also invited relevant personnel of the FAW Automobile Research Institute. He said: “Remember that in a discussion I gave an example of Xiali to ask the experts involved in the discussion. If you use Xiali as a sample and focus on the full power of FAW, is it possible to develop a car like Xiali? I got it. The answer is 'Impossible'."

This is not an exaggeration. Those who are familiar with the history of China’s auto industry may remember that during the “7th Five-Year Plan” period, FAW independently developed a light vehicle and liberated 488, developed independently, and a component could not be exported, and the entire vehicle would not be able to get out. The result took seven years, resulting in Huge loss. However, Qingling and Jiangling, which cooperate with multinational companies, can earn 20,000 yuan for the production and sales of a car.

Chen Bin said that he also asked many people who questioned why the country did not support self-development. At the time, these companies had never stood up to support them when FAW was experiencing difficulties in its own development. Because the most important historical background at the time was the overall backwardness of the country’s auto parts and components, and the country’s entire manufacturing industry was lagging behind.

This is reminiscent of a report on the external power of Shanghai Volkswagen in 1988. The West German Der Spiegel weekly described the new Shanghai Volkswagen factory in an article published on April 4th: “The Volkswagen plant seems to be produced on an island – there are almost no parts supply factories in China” "The factory building is a dark and dirty temporary wooden house, and the wind blows in through the broken glass window." It now appears that although the author of this article was harsh in terms of words, but how many people have recognized our true starting point for the development of cars.

Utilize foreign capital to improve the development level of China's auto industry

In terms of independent development, we really have to face such a basic fact. To end CKD and achieve localization, a blank piece of paper is required to start with parts and components. The ratio of the total investment of the parts factory to the auto manufacturer is 2: 1.

Regarding the pace of independent development in China, Chen Bin commented: “Over the past 20 years, we have used foreign capital to greatly increase the level of development of the Chinese auto industry. Through the joint efforts of both Chinese and foreign parties, the manufacture of automotive products has reached international standards. The basics of the parts industry have also been greatly improved. We have not only participated in international competition on a large scale, but also laid the foundation for the independent development of domestic automobile production companies."

Wang Fuchang also made corresponding comments on this: “Some people say that for more than 20 years of joint ventures and cooperation, we have only purchased products and have not absorbed breakthroughs in technology. I disagree with this point of view, in the localization of spare parts. The question glazing on the national policy took more than a billion yuan to build today's parts base.Without today's parts system, independent innovation is difficult to carry out, everything is divided into two. So insist on opening up We must also insist on this type of independent innovation. We cannot say that we will close our doors and do it ourselves."

When we talk about auto-innovation, we naturally think of Chery.

On November 22nd, 2005, at the China (Guangzhou) Automobile Forum, Yin Tongyao, the president of Chery, once said with deep feeling that the development of Chery is the result of the development of the Chinese automobile industry in the past 50 years and is also the result of 25 years of reform and opening up. He said that special thanks go to the overseas companies that have invested in China because they cultivated talents for us and nurtured supporting systems.

The system problem is not solved. The strength of the Chinese auto industry can only be a slogan.

American scholar Huntington once said: "Modernity breeds stability, and the modernization process breeds turmoil." China, which has just emerged from the era of planned economy, has many imperfect places, and there are also explorations in the choice of routes. When people are eager for China to reach the economic level of the developed countries as quickly as possible, the eagerness of “fighting iron and not being steeled” has led people to pay excessive attention to the development of self-owned brands to the support of the government.

In this regard, Chen Bin puts forward two points: When local governments and enterprises do not take into consideration the interests of the state, enterprises, long-term interests, and recent interests, independent innovation can only become a slogan of the government. When many institutions and concepts are not completely unified, the development of the Chinese automobile industry is indeed a slogan. This may be the reason why Chen Bin quoted the proprietor of a multinational company as saying that "the way out of China's automobile development lies in national capital and private capital."

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