China Shifts Gears: Automakers, Oil, Pollution, and Development (review)

Jameson M. Wetmore’s Review of Kelly Sims Gallagher, China Shifts Gears: Automakers, Oil, Pollution, and Development MIT Press 2006 Jameson M. Wetmore Received: 9 June 2008 /Accepted: 9 June 2008 / Published online: 24 September 2008 # National Science Council, Taiwan 2008 For several decades those who follow the automobile industry have been speculating as to what will happen when the Chinese people begin to build and drive automobiles in large numbers. The issue has generated both excitement and concern. While automobile executives have fantasized about a potentially large and lucrative market, others worry about the local and global environmental effects of hundreds of millions of new drivers. The ultimate economic and environmental consequences of China’s motorization are still not known, but the process is well underway. Moreover, the forces that will largely determine the outcome have been in motion for some time. In China Shifts Gears, Kelly Sims Gallagher, director of Energy Technology Innovation Policy at the Belfer Center for Science and International Affairs at Harvard University, examines one particular segment of this process. The book explores the role that foreign manufacturers have played in the development of the Chinese automobile industry in an effort to discern whether or not these relationships can help create vehicles that are environmentally responsible. Gallagher’s hope is that with the help of foreign direct investment (FDI) China can leapfrog past older automotive technologies that consume more fuel and produce more emissions than those available in the United States today. To determine what effect FDI has had on the adoption of new environmental technologies, Gallagher interviewed 90 people in the automobile industry and Chinese government from 1999 to 2003. Her book focuses on three case studies: a joint venture that began in the early 1980s between Beijing Automotive Works (later Beijing Automotive Industry Holding Company) and Jeep (first a subsidiary of AMC and later Chrysler); a project that brought Shanghai Automotive Industry Corporation (SAIC) together with General Motors in the 1990s; and Ford Motor Company’s stake in Jiangling Motors Corporation and other ventures in the 1990s. East Asian Science, Technology and Society: an International Journal (2008) 2:299–301 DOI 10.1007/s12280-008-9047-4 J. M. Wetmore (*) Consortium for Science, Policy and Outcomes, P.O. Box 874401, Tempe, AZ 85287-4401, USA e-mail: Jameson.Wetmore@asu.edu Gallagher’s basic conclusion is that using FDI to spark technology transfer was not as successful as it could have been. The goal of the Chinese government to build an automobile industry using foreign help was hampered in large part because foreign companies were focused on China as a place to sell cars and not as a place to develop cars. They saw partnering with Chinese corporations as a mechanism to gain access to a potentially lucrative market and not as an opportunity to share knowledge. Gallagher is also not satisfied with the transfer of technologies intended to make automobiles cleaner and more efficient. She notes that while US firms included pollution control technologies on the vehicles they built in China, they did not equip them with the latest devices being deployed in the United States. This somber view of FDI is tempered a bit, however. Gallagher notes that not only did FDI help to develop automotive parts suppliers, but that “foreign auto technology transferred to China beginning in 1983 effectively allowed China to skip over about 20 years of automotive technological development to a new generation of automobile technologies.” Thus while FDI in the 1980s and 1990s did not get China’s automobile industry to be on par with the United States, it did get China much closer than perhaps it might otherwise have been. Gallagher believes that lessons can be learned from these experiences and that success can be attained in the future. For instance, she argues that the Chinese government should make a concerted push for stricter regulations since US manufacturers promptly responded with new technology when the Chinese government set performance standards for automobiles. In addition, she encourages China to build on its successes in promoting internal innovation and education with government sponsored R&D. Gallagher also maintains that the international community should not sit idly by. She contends that...