Abstract
In the mid 1970s, and the early 1980s, China witnessed dramatic import surges in passenger cars and small trucks. The shift to economic reform unleashed domestic demand for higher-quality cars for the new foreign tourism sector, and trucks for the rural boom. Rising imports were the catalyst behind the Chinese decision to allow machinery building and automotive officials to go abroad and explore possibilities for foreign investment and technology transfers in the late 1970s. State finance considerations, specifically foreign exchange controls, precipitated the decision to “open up” and seek outside investment in capital, technology, and related technical and managerial know-how to help modernize the automotive industry. However, the decision to rely on international transfers of technology was also a result of the post-Mao Party leadership’s acknowledgement that China’s abilities to achieve internally generated technological innovation had deteriorated to the point where drastic measures were necessary. Except for in the defense industries, China had overlooked product design and innovation in most of its industrial sectors. Either the planning system had not provided adequate incentives to innovate, or inadequate resources had been given to improve product designs and modernize factories. Historically, the main function of the enterprises was simple reproduction for meeting basic societal needs.
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Notes
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© 2010 Gregory T. Chin
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Chin, G.T. (2010). The Chinese State: International and Comparative Perspective. In: China’s Automotive Modernization. International Political Economy Series. Palgrave Macmillan, London. https://doi.org/10.1057/9780230248540_2
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