Industrial Upgrading in Global Production Networks: The Case of the Chinese Automotive Industry

Abstract

This article examines the development of China's automotive industry. The evidence shows that integration in global production networks has stimulated upgrading of technological capabilities among automotive firms. However, the competitiveness and intra-industry analyses show mixed results. Although intra-industry trade in automotive products has improved since 2000, the trade competitiveness of completely built up vehicles has largely remained in low value added activities. Nevertheless, firm-level evidence shows that the industry has undergone considerable upgrading, albeit in low value added activities. Trade integration and host-country institutional support have been the prime driving forces of technological upgrading in the automotive industry in China.

ERIA-DP-2015-07