The Political Economy of the Car

"What happens if the Chinese all have cars?" This question, posed on page 3 of Matthew Paterson's Automobile Politics: Ecology and Cultural Political Economy, provides a thematic link between the two books reviewed in this essay, Paterson's and Kelly Sims Gallagher's China Shifts Gears: Automakers, Oil, Pollution, and Development. At one level, this link is quite loose. For Paterson, China is one among many examples of the growth in the geographical spread of, and therefore the environmental impact of, car culture, an example that he does not discuss in any particular detail. For Gallagher, China is the focus of the study. Beyond a common focus on cars and the environment the books have little in common, in terms of empirics or methodology. At another level, however, the common focus on the effects of car culture provides an important link. The two books offer radically different approaches to a fundamentally similar set of concerns.

These two approaches are emblematic of two distinct literatures in the field of global environmental politics. Gallagher's book is an example of what might be called the policy approach to global environmental politics. This approach is consistent with the mainstream approach to international political economy as practiced in the United States, as found in journals such as International Organization. This approach focuses on minimizing environmental externalities from international economic activity while at the same time minimizing the cost to that activity of controlling environmental externalities. Paterson's book is an example of the critical approach to global environmental politics, consistent with an approach to international political economy that is more likely to be considered mainstream in Britain than the United States, and is found in journals such as Review of International Political Economy. This approach focuses on the ways in which environmental degradation is part and parcel of global capitalism, and argues that sustainability requires a fundamental rethinking of capitalism.

Both books do what they do well. Gallagher's China Shifts Gears looks specifically at the question of the extent to which foreign automobile manufacturers that are involved in joint ventures with Chinese car companies transfer state of the-art pollution control technologies to their Chinese partners. The empirical meat of the book is a set of three case studies of joint ventures, all of which make use of on-site research and interviewing in China. All three joint ventures examined are with US companies, a selection bias that is unfortunately not addressed in the book. Along with this primary research, there is a history of the Chinese car industry in the context of Chinese industrial development and development policy, a discussion of the role of foreign technology in that development, and a review of the broader literature on technology transfer in both the economic development and environmental management literatures.

The short answer is that foreign companies seem to transfer little of their state-of-the-art pollution control technology to their Chinese partners. They transfer the technology to produce cars that meet Chinese pollution and fuel efficiency standards, but do not transfer to their partners any meaningful design capabilities. Gallagher attributes this shortcoming to two factors, one generalizable and the other specific to the peculiarities of the Chinese car industry. The generalizable factor is state policy. Foreign car companies produce cars for the Chinese market that meet official Chinese standards. They do not produce cars that exceed these standards, because doing so would put them at a competitive disadvantage with respect to other joint ventures. The Chinese government could therefore boost the inclusion of environmental technologies in Chinese cars by increasing environmental standards, something that the government has indeed been doing at least somewhat effectively for a decade now. The specific explanation for lack of transfer of design capability is a somewhat odd disinterest on the part of the Chinese car companies in learning how to design cars on their own. This disinterest is most likely an artifact...