Research On The Path Of Sino-foreign Joint Venture Affecting The Development Of China's Automobile Industry

Automobiles are one of the most important industrial products that have changed human life styles in recent hundred years.While they have become essential durable consumer goods for households in many countries,they have also profoundly affected many industries including petroleum,road traffic,automobile insurance,and automobile maintenance.Thus the automobile industry has featured all the characteristics of becoming a pillar industry.For this reason,its development level has become a key factor in measuring the modernization of an economic entity.The reform and opening up decided by the Third Plenary Session of the Eleventh Central Committee of the Communist Party of China has fundamentally changed the development pattern of China's auto industry,whether in terms of the production capacity of complete vehicles,the domestic supporting system of parts,or the market share of independent auto brands.China has undoubtedly become a contemporary automobile power.The great changes in China's automobile industry are highly related to the reform of state-owned enterprises and the opening up to the outside world.In order to change the problems of inactive auto industry enterprises and backward technology,the Chinese government has conducted a pilot modern enterprise system for major state-owned automobile groups and encouraged them to become well-known in developed countries.Joint ventures of automobile companies,through mixed ownership,overcome the problems of shortage of funds,backward technology,rigid system and low efficiency.Over the past 30 years,Chinese and foreign integrated vehicle companies have become an important part of China's automobile industry,and have gained authoritative economic data,in the aspect of their development speed and economic contribution.At the same time,there are also cases in the academic and business circles using technology for the market in the process of large-scale infrastructure construction,which proves that the Sino-foreign joint venture of China Automobile has failed to achieve the goal of market-for-technology.Therefore,questions are raised about the survival value and ability of the Sino-foreign joint venture in China's automobile industry.The former is mainly reflected in the questioning of joint venture motivation,benefit distribution and innovative functions,while the latter is concentrated in response to government regulations,competition patterns and consumption transformation.Questioning ability.The economic theories studied in this dissertation mainly focus on international trade and industrial evolution.The former is represented by theories of comparative advantage,absolute advantage and international production compromise.The latter is represented by the theory of industrial structure evolution,industrial organization evolution and industrial life cycle theory.It also involves related theories such as corporate environmental responsibility,innovative functions and social responsibility.There are also a lot of academic studies on analysis Sino-foreign joint ventures,related to the technical and economic characteristics of the automotive industry.And the influence of this kind of enterprise organization and the development of China's automobile industry by applying these theories.Generally speaking,these studies provide a valuable interpretation of the existence of the Sino-foreign joint venture in China.While having an impact on the relevant policies of the Chinese government,it also leaves some room for expansion: First,multinational companies enter the Chinese automobile industry There is a lack of systematic theoretical interpretation of the superimposed problems of state-owned enterprise restructuring and economic transformation.At the beginning of China's reform and opening up,the Sino-foreign joint venture implemented by the auto industry under the conditions of a shortage of economy had distinctive transitional economic characteristics.The dual constraints of enterprise system defects and backward market development.To implement Sino-foreign joint venture pilot projects in the automotive industry,one is that major automobile manufacturers should complete the transformation of modern enterprises represented by the shareholding system,so that they can have the status of independent market players for cooperation with foreign capital;second,they need to follow international practices and market rules.The capital invested by the two parties to the joint venture is priced,and asymmetric information is superimposed on the immature market.The evolutionary effect of the comparative advantages of the two parties' inputs is obviously different from the transactions between mature market players in the classic market economy countries.The third is based on the strategic position of the automotive industry.The Chinese government imposes a restriction on the proportion of foreign investment in Sino-foreign joint ventures not to exceed 50%,and most Sino-foreign joint ventures have adopted a structure of equivalent equity ratio.This structure has an impact on the corporatization process of shareholders' comparative advantage factors.Perhaps it is a new problem faced by classic international trade theory.Secondly,the literature is mostly focused on the issue of technology spillovers from the Sino-foreign joint venture to the manufacturing industry,including the automobile industry,and many scholars hold the view that “the market has not exchanged technology”.However,scholars holding these views have not systematically and comprehensively analyzed the corporatization and marketization process of the comparative advantages of the shareholders of both parties in the Sino-foreign joint venture,and have not reflected the law of the dynamic evolution of the model at the factor input end,automobile consumption end and supply chain links.Furthermore,it is impossible to make a rational and objective judgment on the impact of this type of model on China's auto industry.Third,some literatures have also empirically analyzed the typical relationship between national income and automobile consumption through modeling.However,there are not many literature supporting theoretical research through typical cases of Sino-foreign joint venture automobile enterprises.Realistic rationality is challenged.The research in this dissertation can be divided into the following four parts:The first part uses literature research and the evolution analysis of China's Sinoforeign joint venture model to demonstrate the necessity and feasibility of this model to influence the Chinese auto industry through the internal and external marketization of the input end,the consumption end and the three-dimensional path of the supply chain.While literature research seeks both theoretical support for the formation and development of the Sino-foreign joint venture model in China's automobile industry,it also has theoretical value and application space for deepening research in connection with Chinese practice.Simply interpreting the effectiveness of the Sino-foreign joint venture model from the perspective of technology for the market may not fully reflect the historical fact of the integration and symbiosis of the comparative advantages of the Chinese and foreign parties at different stages of evolution.Therefore,it is necessary to re-evaluate the unique laws and value of the Sino-foreign joint venture model in the Chinese automobile industry.The background,motivation and function of the Sinoforeign joint venture model in China's auto industry in the initial,development and mature stages of Sino-foreign joint venture operations proved that this model is a largescale practice of resource allocation through market mechanisms during the transition from a planned economy to a market economy.The market's decisive role in resource allocation is of great significance to the development of the automobile industry.Systematic research on this type of practice is not only necessary,but also feasible;The second part uses the Chinese-foreign joint venture model to influence the development of China's auto industry through the deepening of the market mechanism,and conducts a special analysis of the mode's mechanism and implementation effects on the factor input end,auto consumption end and supply chain links.First of all,the Sino-foreign joint venture model affects China's auto industry through factor input.In addition to the technical and non-technical classification of input elements,and the cluster analysis of the interaction characteristics of these two elements in the corporatization process,the Chinese-foreign joint-venture vehicle companies' contributions to the Chinese automobile industry include capital,technology,land,and other factors,is also discussed in the marketization process by different categories.Finally,the Fally(2012)model is used to theoretically analyze the evolution mechanism of the technical elements of the Sino-foreign joint venture model in the Chinese automobile industry;secondly,the Sino-foreign joint venture model affects the Chinese automobile consumer market through the automobile consumer side.After discussing the general laws of automobile consumption and the transition,speed,multiplier and multi-polar effects of China's automobile consumption,this paper analyzes the initiation,transmission and adaptation effects of the Sino-foreign joint venture model in the Chinese automobile consumption market,and uses relevant data to help both Chinese and foreign companies.Conducted a correlation analysis on the consumption promotion behavior of the joint venture vehicle company and the scale,function and quality of the Chinese passenger car market;Third,the Sino-foreign joint venture model affects China's auto industry chain through the supply chain.Analyzed the evolution mechanism of the Chinese-foreign joint venture vehicle company's supply of auto parts in stages and the gradual localization of the market through the market.Meanwhile,a statistical analysis based on the five major customers of China's listed parts and components companies is carried out on the contribution of Sino-foreign joint ventures in the Chinese automotive supply chain to the financing of Chinese local parts and components companies through the capital market.In the third part,Dongfeng Nissan Co.,Ltd.is selected to conduct case analysis to support the results and inferences of the above research.Firstly,reflecting the fact that the foreign technology resources joint-ventured and localized in China,through the technological interaction between Dongfeng Nissan Technology Research Center and Nissan Technology Research Center;Secondly,proofing that sino-foreign joint venture respond to the needs of China's automobile consumption by creating consumer welfare through a variety of ways,and achieve sustained sales growth,through studying practice of Dongfeng Nissan Sylphy;Thirdly,studying the evolution process of the relationship between Dongfeng Nissan and suppliers,from transaction,collaboration to strategic partnership to corroborating the relevant inferences in Chapter 5.The fourth part focuses on the environmental changes and strategic decisions faced by the model of Sino-foreign joint venture.Firstly,it is believed that the Chinese auto market promoted by Sino-foreign joint ventures has gone through a period of development and shift,and will eventually evolve towards a mature period.it shows the characteristics of a decline in growth rate,changes in the consumption structure,two-level differentiation in the industry,and the rise of independent brands;Secondly,relevant regulations issued by governments of various countries will also have a profound impact on the ecology of the automobile industry.Traditional Chineseforeign joint venture auto companies will not only face the challenge of abolishing the restrictions on foreign shareholding in the automobile industry in 2022,but also face the challenge of technological upgrading that new energy vehicle regulations superimpose on the production of automobiles;Thirdly,there is a series of recommendations on the Sino-foreign joint ventures facing these changes and challenges.This paper covering the following parts:First,Sino-foreign joint venture vehicle companies usually adopt a peer-to-peer joint venture model of well-known brands in developed countries and large-scale stateowned automobile groups in China,which is a typical representative of mixed ownership reform of state-owned enterprises.The formation and evolution of this model is highly related to China's reform from a planned economy to a market economy and from a factory system to a company system in state-owned enterprises.The value judgment of this model requires the establishment of a logical analysis chain of reform and opening up-Sino-foreign joint venture pilot-market system deepening-automobile industry development.Only in this way can we rationally and objectively interpret the relationship between Sino-foreign joint ventures and the development quality of China's automobile industry.Second,the Sino-foreign joint venture model has a mechanism to influence China's auto industry through the dual marketization of factors.Based on the initial marketization,continuous marketization,internal marketization and external market cluster analysis of the technology and non-techniques of the Sino-foreign joint venture model,through the analysis of the mechanism of the corporatization of technology elements,it can be inferred that the technology entering the joint venture company is the technology element according to the market.The result of fair consideration is also dictated by the market competition mechanism.The relationship between technology and the market in the automotive industry is different from the market-for-technology in China's infrastructure sector.It is more manifested in the joint venture company's expansion of the Chinese market through technology integration.Third,the Sino-foreign joint venture model affects the functions of China's automobile consumer market in a variety of ways.Automobile consumption involves brand,model,price,function,quality and service.Only by understanding and respecting the laws of the market can it be possible to survive and develop in the fierce competition.Based on the ever-changing demand of China's automobile consumption market,Sino foreign joint venture automobile enterprises have created consumer surplus for China's consumption by increasing and reducing prices,increasing models,improving services and innovating technologies.It can be inferred that the progress and optimization of China's automobile consumption are highly related to the consumption introduction,optimization and adaptation of the Sino-foreign joint venture model.Fourth,the supply chain of Sino-foreign joint venture vehicle companies is gradually localizing in China through the market.While expanding the scale of China's auto production and sales,the Sino-foreign joint venture model has to follow the principles of corporate profit creation and risk aversion.Therefore,most of them have made a phased and focused localization choice for the supply chain.Sino-foreign joint venture car companies often change from quantitative changes to qualitative changes in the market supply and demand,and gradually change to a sudden inflection point.They can make rational choices in the supply chain and achieve the effect of selfinterest.Fifth,the effect of the Sino-foreign joint venture model on China's auto industry through three paths can be supported by case studies.The case of Dongfeng Nissan shows that: through the strategic interaction between Nissan Technology Center and Dongfeng Nissan Technology Center,it shows that the corporatization of foreign technology objectively exists.Through the case of the family car Sylphy brand occupying a leading position in the segmented market for a long time,the Sino-foreign joint venture model is verified The contribution in guiding automobile consumption,responding to consumer demand,and creating consumer surplus also shows that the automobile consumer market is stimulated and maintained by a variety of factors;through the process of dynamic optimization of the relationship between Dongfeng Nissan and parts companies,it shows that parts The localization is not only related to market competition,but also related to the progressive strategic choice of the relationship between vehicle companies and parts companies.