Joint venture model does not promote auto development

In recent months, a significant report titled *"Status and Countermeasures for the Independent Development of the Chinese Automobile Industry,"* authored by the Institute of Government and Enterprise at Peking University and commissioned by the Ministry of Science and Technology, has sparked widespread discussion within the Chinese auto sector. The study traces the evolution of China's automotive industry over the past five decades, with a particular focus on the joint venture model that has dominated the market. The report concludes that this model has not effectively fostered the independent development of domestic automakers. Instead, it highlights the critical importance of "independent intellectual property" in ensuring the long-term survival of the Chinese auto industry. It argues that reliance on foreign technology is unsustainable, and only through self-reliance can the sector truly thrive. According to the research, China’s government must implement supportive policies to encourage and protect indigenous companies that are pursuing independent innovation. The report also emphasizes that the key to technological advancement lies in securing design rights — a crucial factor that has been largely overlooked in many joint ventures. During an exclusive interview, Professor Lu Feng, the director of the report, shared his insights. He explained that the report took approximately three to four months to complete, involving extensive fieldwork and interviews with major automotive firms. One of the most striking findings was the realization that the current joint venture model is not conducive to building internal capabilities. In fact, it often results in Chinese partners merely following foreign designs without any real autonomy. He cited an example involving SAIC Volkswagen, where foreign-provided blueprints contained errors, but the Chinese side had no authority to make adjustments. This lack of design control highlights a fundamental flaw in the joint venture system, which, rather than transferring knowledge, often leaves Chinese companies dependent on external expertise. Professor Lu also pointed out that many joint-venture companies have become complacent, relying on foreign technologies without investing in their own R&D. He compared this situation to a child who is given all the tools to learn English but never actually practices. Without active engagement and effort, true understanding cannot be achieved. However, there are positive examples. Companies like Changan Automobile, which have successfully combined foreign collaboration with independent development, demonstrate that self-reliance is not only possible but also effective. Similarly, Geely has shown great determination in developing its own models from scratch, despite limited resources and challenges. The report stresses that the difference between successful and struggling companies lies in "courage" — the willingness to take risks, invest in R&D, and push forward with innovation. Those who do not embrace this mindset will remain stagnant, while those who do will gradually gain a competitive edge. Looking ahead, the report warns that if the trend continues, China may become little more than a manufacturing base for foreign brands. Without strong independent development, the country risks losing its own automotive identity altogether. Ultimately, the report calls for a shift in strategy, urging the Chinese auto industry to prioritize self-reliance as the only viable path forward. While challenges such as a lack of experience and technical data remain, the long-term benefits of independent development are clear. With time, perseverance, and the right policies, China can build a truly global automotive industry.

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