Internationalization: The Only Way to Develop China's Automobile Industry Better and Faster


Zhang Wei Deputy Director of Industry Department, Ministry of Commerce

I am very pleased to attend the 2007 China (Guangzhou) Automobile Development Forum at the invitation of the Organizing Committee. The theme of this forum is "Scientific development and integration into the world" and it is highly targeted to the development of China's auto industry, fully embodying the creativity and vision of the organizing committee.

The automotive industry is one of the industries with the highest degree of globalization in the world today and has the highest correlation with other industries. Automobiles and auto parts have a strong two-way symbiotic relationship. The cultivation and development of the automobile industry chain has contributed to the development of the automobile industry. It plays a very key role. Now more and more people have realized that competition in the future of automotive products will be more reflected in the supply chain and supply chain competition, rather than the competition between individual companies. We should also see that in the new global production system, the international division of labor in the automotive industry is further deepening and refinement, from the division of labor within the industry to the division of labor within the product, the global industrial chain is continuously extended, corporate finance, procurement, production, Sales, service and R&D accelerate globalization. With the in-depth development of economic globalization and market integration, maximizing the deployment of globalization through resources and production factors, reducing costs, and being close to the market will be the key to maintaining the vitality and international competitiveness of auto companies. In fact, China's auto industry has begun to integrate into the world, not to be involved in the issue, but how to better integrate into the world in the future. Taking the internationalization road of mutual benefit and harmonious development is the only way for China's auto industry to achieve sound and rapid development. I would like to talk about my own views and understanding from the following five aspects: policy environment, market growth and industrial undertaking capacity, participation in international competition, the situation and tasks we face, and policy recommendations for your reference.

I. China's auto industry has gone from closed to semi-closed to full opening, creating a favorable policy environment and institutional guarantee for China's auto industry to participate in the globalization process.

In essence, economic globalization is to realize the free flow and optimal allocation of production factors and resources globally. The process of globalization is essentially a process of gradually eliminating barriers, opening up markets, and liberalizing trade and investment. It requires stable and transparent processes. , standardized, predictable laws and regulations and other system guarantees.

In the past 29 years, China has always adhered to the basic national policy of opening to the outside world, and the auto industry’s openness to the outside world has continued to increase. Since joining the WTO, the Chinese government has conscientiously fulfilled all its commitments, shouldered its due obligations, continued to open up markets, and improved its legal and regulatory systems, which has created conditions for the globalization of talents, technologies, equipment, capital, management, and other production factors. The Chinese auto industry has not only benefited from it but also made important contributions to the development of the world auto industry. Specifically embodied in eight aspects:

(a) The tariff has dropped significantly. At present, China's overall tariff level has dropped from 43.5% in 1992 to 9% in 2006, and the actual tariff level is about 6%, which is close to the tariff level of developed countries. The level of automobile tariffs has dropped sharply year by year. As of July 1, 2006, the vehicle tariffs on vehicles have dropped to 25%, and parts and components tariffs have dropped to 10%.

(b) From January 1, 2005, the 20-year quota system ended. Any importing business unit that meets the qualification for operation can apply for an automatic import license without barriers.

(3) Adjusting relevant industrial policies that are incompatible with WTO rules. Since the accession to the WTO, full compliance with the Agreement on Trade-related Aspects of Intellectual Property Rights (TRIPs Agreement) and Agreement on Trade-Related Investment Measures (TRIMs Agreement), revised the automobile industry policy, and gradually eliminated the production of automobiles. Restrictions on categories, types or models; Gradually liberalize the authority of local governments in approving auto joint ventures; Let go of the equity limit of engine joint ventures; Allow foreign ownership; Establish laws and regulations that apply uniformly to domestic and imported automobiles and parts and components And standards.

(d) Further opening of foreign-funded enterprises in service trade. From 2005, foreign trade rights have been liberalized. In addition, it gradually opened auto-assisted distribution services, allowing foreign non-bank financial institutions to engage in auto consumption services, allowing foreign insurance companies to operate statutory insurance businesses and gradually liberalize transportation services, maintenance services, and freight forwarding services.

(5) From April 1, 2005, the “Administrative Measures for Sales of Automobile Brands” was implemented. The core of the "Measures" is the authorized sales of automobile manufacturing enterprises. The sales activities of automobile brands must first obtain the authorization from the automobile manufacturing enterprises or the authorized automobile dealers. The implementation of the “Measures” is conducive to the establishment of an automobile marketing service network led by automobile manufacturers, fully guaranteeing the legitimate rights and interests of automobile sales companies and consumers, and giving full play to the enthusiasm of auto manufacturers and sales companies.

(VI) From April 1, 2005, the “Measures for the Administration of Imports of Auto Parts That Constitute the Characteristics of the Vehicle” will be implemented. The "Measures" stipulates: Imported parts and components that have been verified as constituting the characteristics of the whole vehicle. The Customs shall classify the vehicle and collect tariffs and import value-added tax at the vehicle tax rate to prevent evasion of customs duties and crack down on illegal assembly. Consumer interests and personal safety.

(7) Foreign-funded enterprises enjoy national treatment in the national trade policy concerning the automobile industry. Of the first 160 national automobile and auto parts export bases jointly identified by the Ministry of Commerce and the National Development and Reform Commission, there are 61 foreign-funded enterprises (including 5 solely-owned enterprises), accounting for 39% of the total.

(8) New measures for the protection of intellectual property rights. In order to consolidate the achievements made in the protection of intellectual property, we systematically promoted and gradually improved various policies and measures. The National Office for Protection of Intellectual Property and the member units of the State Protection Intellectual Property Working Group formulated the “2007 China Intellectual Property Protection Action Plan”. It promulgated 276 specific measures from 10 aspects including legislation, law enforcement, trials, mechanism construction, publicity, training and education, international exchanges and cooperation, promotion of intellectual property rights protection for enterprises, provision of services for rights holders, and special studies. The implementation of the plan will further strengthen the protection of intellectual property rights, standardize the market economic order, and create a favorable investment and operating environment for Chinese and foreign companies, including autos and parts and components companies.

Second, China's auto market has a strong growth and broad prospects. China's auto industry system is complete and fairly basic. The high growth of this market and its strong international industrial undertaking capacity are the driving forces for the acceleration of the internationalization of China's auto industry.

After more than 50 years of development, the Chinese auto industry has basically established a relatively complete auto industry production system. Under the impetus of the reform and opening up policy, under the encouragement of a strong domestic market, through the joint efforts of the automotive industry, it has achieved rapid development. , Has become the world's third largest automotive producer, the second largest consumer market and the largest potential market. The high growth and broad prospects of the market have become the driving force for accelerating the internationalization of China's auto industry.

At present, China is in a historical period of building a well-off society in an all-round way. Industrialization and urbanization have been further accelerated, and the upgrading of industrial structure has entered a crucial stage. The Chinese government has clearly stated that it is necessary to develop China's auto industry into a pillar industry of the national economy before 2010 and become the world's major automaker. For a long period of time, China's auto industry will continue to maintain rapid growth. It is predicted that in 2010 China's auto market demand is expected to exceed 9 million and the number of cars is expected to reach 5 million. This will provide Chinese auto companies and foreign companies with Huge business opportunities and cooperation space.

China's auto production exceeded 1 million units in 1992. After 8 years of development, it exceeded 2 million units in 2000. After entering the WTO, it entered an accelerated development stage: it increased at an annual rate of 1 million units from 2002 to 2005. It reached 5.7 million vehicles in 2005 and 7.28 million vehicles in 2006. The ranking of China’s auto production in the world has jumped from eighth place in 2001 to the current third place. The contribution of the automotive industry to domestic economic growth has increased significantly. In 2006, the auto industry realized an added value of 379.1 billion yuan, an increase of 34.5%, accounting for 4.2% of the national industrial added value, and 1.8% of the gross domestic product (GDP) in 2001 (1.1% in 2001). Throughout 2007, it is expected to exceed 8 million vehicles.

The continuous growth of the automotive market also provides good conditions for the development of the industry. With the rapid development of the national economy, the acceleration of urbanization, and the continuous improvement of people’s living standards, the demand for the automotive market will continue to grow, and the level of automotive will continue to increase. At present, the number of cars in China is about 38 million, and it is expected to reach 80 million to 100 million by 2010. Even so, China’s car ownership per 100 people is equivalent to that of the United States in 1925. The British level in 1950 and the Japanese level in 1965 have great market potential.

It should also be particularly pointed out that the integration of the auto industry into the world and the realization of mutual benefit and win-win results is the common goal pursued by all. However, to realize mutual benefit and win-win cooperation requires not only an idea but also an objective material basis. Although China's auto industry has achieved considerable development, it still has a long way to go compared with the developed countries’ auto industry. The complementarity of China's auto industry and the auto industry of Europe, the United States, Japan, and other developed countries is the same as the complementarity of our economy. It is structural, stable, and long-term. This complementation is the prerequisite and foundation for strengthening cooperation and achieving a win-win situation. In the context of economic globalization and regional integration, the international competitiveness will become smaller and smaller if American cars are created at the cost of the United States. If China's cost is used and independent innovation is not conducted under open conditions, this kind of international competitiveness will become weaker and weaker. Facts have proved that by strengthening cooperation, the strength of China's auto industry is continuously increasing, and the rapidly developing Chinese auto and parts and components markets provide domestic and foreign auto companies with an excellent competitive arena and substantial profit returns. The process of opening up in China is also a process of sharing profits with foreign investment. From 1990 to the present, foreign investors have already remitted nearly 300 billion U.S. dollars in profits, and more than two-thirds of the nearly 300,000 foreign-invested enterprises currently operating are profitable. . The U.S. Chamber of Commerce’s survey also showed that three-quarters of U.S. companies in China are profitable, and that more than 40% of U.S. companies’ profit rates in China exceed their global profit rates.

Through joint ventures and cooperation and the introduction of foreign capital, technology and management experience, the domestic automobile product structure, manufacturing capacity and management level are gradually in line with international standards, and the scale of exports has grown rapidly. At the same time, multinational corporations have also achieved rapid development and have gained considerable profits. The main performance is:

——In terms of domestic market share, in 2006, foreign-owned companies and brands accounted for 74% of the Chinese car market, and have become China's most influential car brands. Among them, there are 965,000 Japanese cars, accounting for 25.2% of the national car market, 717,000 German cars, accounting for 18.7%, 539,000 American cars, accounting for 14.1%, and 377,000 Korean cars, accounting for 9.8%. There are 201,000 French cars, accounting for 5.3%, and Italy and Sweden 34,000, accounting for 0.9%. In the field of parts and components, foreign-funded enterprises have occupied over 60% of the parts and components of domestic major car joint ventures, and have become important suppliers of key assemblies and components for domestic commercial vehicle companies.

——In terms of return on investment, the profitability of major multinational automotive and component companies in China is far higher than that of their home countries. The top five companies with the best profitability in the car industry are Sino-foreign joint ventures. U.S. GM’s investment returns in China are more than imagined. The profitability of manufacturing a sedan in China is equal to that of making 5-6 cars in other countries; the BMW Group’s joint-venture production company in China has a production capacity of 24,000 cars in 2006, which is Brazil’s More than 10 times. The Chinese market has a solid foundation and strength, and its uniqueness is incomparable to other countries. This has made a contribution to China, to multinational companies themselves and to the world. It is a win-win market. Therefore, multinational companies investing in China have increased their investment in China. The investment sector has also expanded from production to sales, logistics, finance, upstream raw material production, and even to the extension of research and development.

Third, China's automotive products have begun to enter a period of rapid and sustained growth. They have shown strong vitality and vitality in actively participating in global competition and gradually realizing market globalization.

The globalization of automotive product trade is an important part of the globalization of the automotive industry. Although the export of automotive products is only the initial stage of globalization of the automotive industry, a form of expression, it is one of the important signs of globalization of the automotive industry.

If the Chinese auto industry wants to play a more important role in the international division of labor system, it must gradually expand its exports to the export of technology and capital, and achieve a variety of international operations in order to integrate at a higher level. The wave of economic globalization. We should soberly realize that in the coming period of a long period of time, maintaining the sustained and rapid development of the health of automobile products, gradually changing the export growth mode, and continuously improving the quality and efficiency of growth are the insurmountable ones for the realisation of globalization of the Chinese automobile industry. Important stage.

Driven by the development of the automotive industry, China's auto and parts trade has also witnessed rapid development in recent years. Specifically in:

——The growth of vehicle exports was bloated and the scale of exports continued to expand. Five years after joining the WTO, China's auto vehicle exports have increased by an average of 95.6% annually. In 2006, the total vehicle export volume reached USD 3.12 billion, an increase of 97.3%.

- Exports mainly to auto parts. In 2006, the export of auto parts was US$ 12.12 billion, an increase of 36.3%, accounting for 76.5% of China’s auto exports.

——The number of export business entities has increased rapidly. In 2006, there were 15,338 export enterprises, and the average export value of the enterprises was only 1.033 million US dollars.

-- The export of finished vehicles is mainly commercial vehicles, and the export of cars has increased significantly. In 2006, China exported 223,728 commercial vehicles, accounting for 69.0% of the total, and exported 92,495 cars, an increase of 197.2%.

——The export is completely self-financing and the export market is developing towards diversification. In 2006, China's export market for automotive products reached 207, of which, vehicle exports were mainly in developing countries and regions, and auto parts exports were mainly developed countries.

——The export of finished vehicles is mainly based on their own brands, and the export volume of foreign brand products is very small.

Since the beginning of this year, China’s autos and parts and components have continued to maintain rapid growth. Exports from January to September totaled 17.2 billion U.S. dollars, an increase of 49.5%. Among them, 414,000 vehicles were exported, an increase of 63.9%, amounting to US$4.79 billion, an increase of 116.8%. The export volume has exceeded last year's full year and it is expected to exceed 500,000 vehicles throughout the year. At this rate, exports will exceed 1 million by 2010.

At the same time as direct product exports, the international business model of China’s auto industry has also shown a diversified development trend. Some companies have strengthened joint ventures with foreign auto companies on the basis of expanding exports. For example, Chery’s companies have successively The production bases have been established in Indonesia, Egypt, Russia, and other places. Changan, Brilliance, FAW, Geely and other automobile companies have also established production plants overseas; there are also some enterprises that have started direct foreign investment with the support of the country’s “going out” strategy. , SAIC acquired a 48.9% stake in Ssangyong Motor Co., Ltd. for approximately US$500 million.

Although the internationalization of China's auto industry is generally at its infancy, the continuous growth of exports and the diversification of business operations have laid a valuable foundation for the internationalization of the auto industry.

Fourth, the realization of internationalization of China's auto industry is facing a rare opportunity. At the same time, it is facing a serious challenge. It is necessary to effectively change the export growth mode and improve the quality and efficiency of growth.

In the new stage of the new century, China's auto industry is facing important opportunities for development.

First of all, there is a large space and level of demand in the domestic and foreign auto markets, and automotive products are one of the most potential export commodities in China. Automobiles and parts and components are the world's largest commodities in the world trade, accounting for 10% of the world's total trade in goods. In 2006, it was approximately US$1.2 trillion. The export volume of Chinese auto products only accounts for about 1.5% of the world's total auto trade volume, accounting for 1% of the domestic total industry sales, and 7.3% of China's auto industry output value. It is the lowest in the electromechanical industry. The domestic market with huge potential also provides important market demand for the cultivation and expansion of domestic enterprises.

Second, we have a relatively complete automobile industry system that has developed over decades and provides a strong supporting and supporting capability for the development of automobile companies. The gap between China's auto industry and the international advanced level has been greatly reduced. It takes about 15 years ahead of the average developing country. It has a structural dislocation with the foreign auto industry and has obvious comparative advantages. In 2006, China’s auto production exceeded 7 million vehicles. China surpassed Germany to become the world’s third largest automobile producer after Japan and the United States.

Thirdly, profound changes have taken place in the internal mechanisms of enterprises. A large number of entrepreneurs and scientific and technological talents who are determined to serve the country, are committed to the revitalization of the national automobile industry, and a number of outstanding self-owned brands with high R&D and innovation capabilities have emerged. Parts companies. The independent research and development and technological innovation capabilities of auto companies have gradually increased. The manufacturing process and management level are gradually approaching the world's advanced level. The capabilities for product development, system support, and module supply have been continuously enhanced, and technologies in the fields of energy saving, environmental protection, and security have reached world advanced level. The gap has further narrowed, and research and development of new energy vehicles have achieved continuous results.

Fourth, the international market continues to increase the demand for cars in China. The middle and low-end cars, passenger cars, trucks and auto parts show obvious comparative advantages and competitiveness. Auto companies have already begun to show off in the international market, initially accumulated experience in entering the international market, and trained their teams. It should be said that achieving sustained and healthy development of China's auto exports is not only necessary but also entirely possible.

While analyzing the favorable conditions, we should also clearly see that the development of China's auto industry and the export of products still face great pressure and challenges. The main reasons are: independent development, weak ability of independent innovation, lack of independent brands and independent intellectual property products, lack of strategies and regulations for export, and relatively small export scale, and the quality and after-sales service level must be improved. The proportion of China’s auto and auto parts exports accounting for the world’s auto trade volume and the proportion of China’s auto industry’s output value is quite different from that of the major automobile production countries such as Japan, Germany, and South Korea, where more than 40% of their auto production is exported. With the increase of energy and environmental constraints, foreign technology and environmental protection standards, safety regulations and certification have also become the threshold for China's auto export companies to strive to leapfrog.

Under the current new situation, China's export of automotive products must effectively change the mode of growth, strengthen industry self-discipline, standardize export order, increase the protection of intellectual property rights, encourage enterprises to innovate independently, and achieve sustainable development.

The direction of the automobile export work: promote the export of parts and components from the low-end products with labor and material-intensive machinery to the transformation of electromechanical and electronic products with high technological content and added value; promote the export of auto vehicles from Small and medium-sized tonnage commercial vehicles, such as trucks and chassis, are mainly shifted to passenger cars, small and medium-sized passenger vehicles, pick-up trucks and other commercial vehicles, and commercial vehicles; the promotion of automobile exports from a single product export to product exports and “going out” Combining technological, export, and capital output changes; promoting the transformation of export products to energy-saving, environmentally-friendly cars and independent brand products.

The following points should be noted in the export of auto companies: First, ensure certain profitability, enhance "hematopoietic function", maintain the low cost of this Chinese auto product at this stage to open up the most important competitive advantage in the international market; second is to improve product quality, especially Reliability, this is an important factor that determines the vitality of auto exports; Third, increase investment in research and development, breaking through foreign technology trade barriers; Fourth, we must learn to protect their own intellectual property, but also learn to deal with intellectual property disputes; After-sales service, improve the after-sale maintenance service network; Six is ​​to accumulate a good reputation, form a brand advantage, so that users establish full confidence.

V. To create a good external environment for auto companies to increase their international competitiveness, and to make China's auto industry increasingly competitive in the international competition

The automobile industry is a pillar industry of the national economy and an important carrier for transforming the growth pattern of China's foreign trade exports.

First, support the further development of automobile export bases, and play a driving and demonstration role in the export of automotive products. Encourage and guide domestic auto and parts and components companies to focus on areas with the potential to develop industrial clusters, promote various forms of alliances and cooperation among parts and components companies, and gradually solve the problem of excessive number, excessive dispersion, and excessive disruption of enterprises in the auto parts industry in China. The status of the company, exerting industrial cluster effects and improving the overall strength of China's auto parts companies. The construction of export bases such as Shanghai, Changchun, and Guangzhou has become a base for independent innovation of China's automobile industry, becoming a platform for international exchanges and cooperation in the automotive industry, becoming an important carrier for the transfer of the world's automobile industry, and also becoming an order to protect intellectual property and regulate the export of automobiles. And promote the promotion of the interests of consumers.

Second, we must take the opportunity of adjusting the production capacity structure to accelerate the structural adjustment of the automobile industry and encourage the development of energy-saving, environment-friendly vehicles and independent brand products. Gradually promote the joint reorganization of auto manufacturers and cultivate large-scale enterprise groups with international competitiveness. Encourage the company of spare parts and vanguards to scale up, carry out cross-regional mergers, alliances, and reorganizations to form a large-scale parts and enterprise group and face two markets at home and abroad.

Third, to encourage auto vehicles and parts and components companies to introduce advanced technologies, key components, personnel and equipment, support auto parts companies to improve their independent innovation capabilities, and enable key enterprises to gradually have the capability of product development, system support, and module supply. We will focus on supporting some key component companies to increase their research and development capabilities, gradually realize the simultaneous development of domestic and foreign vehicle companies, and enter the multinational company's parts and components distribution system.

Fourth, strengthen international exchanges and cooperation in auto parts and components. In order to establish a platform for international exchanges and cooperation in auto parts and components, the Ministry of Commerce supports the establishment of the China International Auto Parts Expo in the United States, Germany, France, Britain, Italy and other 10 countries in accordance with the principles of specialization, enterpriseization, marketization, and internationalization. The 16 associations in the region, GM, Bosch and other 11 multinational automobile and parts groups, and 25 domestic intermediary organizations and key export companies participated in the co-hosting. The first session of the exhibition will be held on November 29 this year. Currently, 50,000 square meters of exhibition space have been booked. 88 countries and regions have registered to participate in the exhibition. The conference will set up a special IP protection office. Exhibitors are required to undergo qualification review. The fair will be organized into a platform to showcase the development level of auto parts and components in China and attract multinational companies to purchase in China. The exchanges and cooperation, the introduction of technology, and expansion will be implemented. The imported platform has become a domestic first-class, internationally renowned parts and components exchange event.

Fifth, we must continue to sum up experience, strengthen source management, and further regulate the export of auto products in a safe and positive manner in light of the actual conditions of exports. The intensity of export order regulation will only be strengthened and will not be weakened. It is necessary to take into account the norms of export order, but also to protect the vitality of exports. (Ministry of Commerce, National Development and Reform Commission and other five ministries and commissions, based on foreign trade laws and other laws and regulations, began to implement export qualification management for automobile complete vehicle production enterprises on March 1, 2007, and authorized management of production enterprises for auto export business enterprises. The number was reduced from 1345 to 517. From January to September, the export value of automobiles increased by 117%, which greatly exceeded the growth of 64%, and the unit price increased by 23.5%. It is estimated that the annual national welfare will increase by about 10 billion yuan.)

Sixth, the Ministry of Commerce will work with relevant departments to leverage on bilateral cooperation mechanisms and the role of China's foreign economic and trade organizations to promote cooperation in certification and mutual recognition of automobile products in major importing countries, actively respond to emerging trade disputes, and strive to improve the external environment for automobile exports. .

Seventh, actively explore ways for joint construction of departments and localities, and support the construction of five major public service platforms such as scientific and technological research and development, information services, product certification, inspection and testing, and personnel training, and gradually solve the common problems faced by auto export enterprises. In particular, efforts are made to increase information services. Regular introduction of technical regulations, standards, and conformity assessment procedures for major importing countries is conducted annually for automotive and parts and components companies. Experts from relevant countries in the importing country are invited to come to China to introduce in depth the relevant regulations governing market access. For China's auto and parts companies to provide technical assistance to cross over foreign countries.

Eighth, the Ministry of Commerce will promptly coordinate with relevant ministries and commissions to promote the construction of ro-ro ships, solve bottlenecks in transportation, and create a fair competitive environment for the export of China's auto vehicles and parts and components.

My introduction is here, and I sincerely wish the China-US Automobile Supply Chain Cooperation and Development Summit Forum a complete success! (Reporter: Wang Hao, Liu Jin, Si Xiaoying)

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