| China has been widely viewed as an emerging "world factory" and the growing presence of the "made in China" label offers visible facts in several product markets. Nevertheless, "made in China" does not mean "made by China" (Kwan,2002). With the finding of the study on China’s automotive industry, the author argues that as long as local firms depend heavily on foreign investors’ technologies, China’s competitiveness is not real. With the spread of economic globalization, multinational automakers and global components suppliers have flooded into China, which partly means the restructuring of value chains in the global automotive industry. Under this circumstances and combined with the influence of industrial policy and market demand, China’s automakers have chosen different kinds of development patterns, to set up a joint venture, or to take self-innovation. In the dissertation, the author has used the core element of Global Value Chain (GVC) approach-governance-to help to explore how China’s automotive firms of different development patterns improve their competitiveness and then realize industrial upgrading.The value chain describes the full range of activities that firms and workers do to bring a product from its conception to its end use and beyond. GVC refers to the value chain that is divided among multiple firms and spreads across wide swaths of geographic space. When GVC analysis plots the flow of goods and services up and down the chain, and between different chains, it is a descriptive construct, at most providing a heuristic framework for the generation of data. However, value chain theorization can also provide an analytical structure, which provides important insights into the determinants of global income distribution and the identification of effective policy levers to ameliorate trends towards unequalisation (Kaplisky and Morris,2001). The research on GVC can be divided into two very broad categories: research on governance and upgrading and sector case studies. Upgrading is a key concept for value chain analysis, which refers to the acquisition of technological capabilities and market linkages that enable firms to improve their competitiveness and move into higher-value activities. As the central concept to value chain analysis, governance can be defined as non-market coordination of economic activity. The starting point for interest in GVC is the fact that firms directly or indirectly influence the organization of global production, logistics and marketing systems. Through the governance structures they create, the take decisions that have important consequences for the access of developing country firms to international markets and the range of activities these firms can undertake.The GVC in automotive industry was considerably restructured during the 1990s, as a result of a combination of changes in the relationships between suppliers and assemblers, and the increasing global reach of the multinational automakers. In this context, many developing countries gain the opportunities to access the global auto production network while facing the lock-in in some kinds of value chain upgrading. The development of the automotive industry in China has clearly been shaped by the politic policy and affected by globalization as well as market demand, thus evolves into two patterns which are joint venture and self-innovation. Endogenous models of economic development seem to have converged on the fact that technology is the engine of economic growth and foreign direct investment (FDI) is expected to generate technology spillovers to local firms in developing countries. However, China’s automotive joint ventures only obtain little progress in technological capabilities under the GVC governance of multination automakers. They have confronted the reality that attaining technological advantage in the global market is extremely difficult, which caused by spillover interception. With the self-innovation pattern, local assemblers govern the automotive industry GVC of their own but need more political policy supports on cultivating the high-level capacities, such as core technology, marketing, logistic and venture capital and so on, which can help them obtain competitive advantages. As the foundation of automotive industry, China’s components industry especially needs upgrading. At present, China’s components manufactories are mainly second-tier or third-tier suppliers. Under the context of GVC, these suppliers’upgrading shall based on the change of governance model and need the efforts from firms, industry associations and government.This dissertation consists in six chapters. Chapter 1 mainly introduces why, what and how the author takes this study, i.e. the significance, object and methods of the research. Chapter 2 reviews the literatures about the governance and upgrading of GVC. Chapter 3 lays out the main features of the global automotive industry and identifies several important trends, then discusses the refraining of GVC in the automotive industry and its implications to developing countries. Chapter 4 firstly analyzes the evolving of joint venture development pattern and self-innovation development pattern, and then applies GVC analysis to assess the present China’s automotive industrial international competitiveness. Based on cross-case study and literatures, Chapter 5 and Chapter 6 examine the upgrading of China’s automakers and components suppliers respectively, and then propose upgrading suggestions from GVC governance perspective.
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