First posted to the China Resurgent Forum on Oct. 10, 2004 at the following link:

http://www.network54.com/Forum/thread?forumid=238054&messageid=1097407264&lp=1097407264

===================================================

The evil WTO has stabbed the Chinese car industry in the back.

Some statistics of China’s car industry as of 2003:

Private car ownership: 10 million;
Number of cars produced: 4.4 million;
World ranking in annual car produced: 4th;
Sales income of car and related industries: 680 billion yuan
Work force engaged in car and related industries: 12 million;
Foreign cars sold as percentage of total car sold: 90%.

I have repeatedly warned that China has made a seriously wrong decision to join the evil WTO. Many people think I am being melodramatic or even kooky for calling the WTO evil and think it is bad for China. These people think that the WTO must be good for China because the Chinese government had decided to join it. For a long time I have warned that the evil WTO will push many Chinese companies into bankruptcies because as the foreign companies are allowed to take over majority shares of joint ventures or even set up wholly owned subsidiaries they will out-compete against the smaller and more backward Chinese companies because the Chinese companies don’t have the advanced technologies to compete against the well organized and highly advanced foreign companies.

I had also repeatedly warned that it is a pipe dream to think the foreign companies will transfer their cutting edge technologies to their Chinese partners after China joined the evil WTO. I had pointed out that in a joint venture China could required the foreign partner to transfer its advanced technologies to its Chinese partner in exchange for access to the Chinese market if China stayed out of the evil WTO. But the evil WTO requires that the member nations open up its economy totally and remove all restrictions to trade and foreign investment. This means that the foreign partner can, after China joined the evil WTO, ultimately buy out its former Chinese partner or dissolve the partnership and set up its own wholly owned subsidiary to make and sell its goods and services. This means that the foreigners would immediately regard their Chinese partners as competitors as soon as China joined the evil WTO. I think it is clear even to the dimmest mind that no foreigners will continue to transfer their most advanced technologies to their Chinese partners when they look forward to compete against their Chinese partners as serious competitors in due time as the foreign partners set up their own wholly owned subsidiaries as sanctioned by the evil WTO. I had made it very clear that to expect foreigners to continue to transfer their advanced technologies following the Chinese accession to the evil WTO is nothing more than a pipe dream born out of Chinese leaders’ one sided wish to quickly advance China’s economy. I had warned that contrary to this rosy pipe dream the ultimate reality is that China will cause the Chinese companies to go into massive bankruptcies.

In a recent article first published by China Daily and re-published in peopledaily.com.cn at the following link, the writer has expressed his fear on all that I had warned against about the danger of the evil WTO.

http://english.peopledaily.com.cn/200410/06/eng20041006_159181.html

Consider the following quote:

“These small players are newcomers to the auto industry without the government's blessing. "The phenomenon is a big embarrassment for China's auto industry," said Jia Xinguang, chief analyst with China National Automotive Industry Consulting and Development Corp. "This is the aftermath of the government's market-for-technology policy on foreign automakers over the past two decades," Jia said.

“The government expected foreign automakers to transfer much advanced technology to their Chinese partners by allowing them to produce vehicles in China. However, what has happened has been contrary to the government's wishes. Foreign automakers have grabbed the lion's share of the lucrative domestic car market through local production, while Chinese firms have failed to assimilate enough technology to greatly enhance their development capabilities.

“"Chinese automakers should possess their own strong development capabilities and brands for fear of any future uncertainties," Jia said. "You can imagine what would happen if foreign automakers were permitted to control majority stakes in joint ventures with Chinese partners or even to set up wholly-owned plants in China one day." ”

As you can see from the above quote the writer has said that the government’s expectation that foreign car companies would transfer their technologies to the Chinese companies has turned out to be wrong. But to me this is nothing surprising as I had warned about this inevitability based on common sense that foreign car companies would not be willing to transfer their best technologies to their future Chinese competitors. Frankly, I don’t know how the Chinese leaders could be so stupid as to expect the foreigners to give away their best technologies to their Chinese competitors. Furthermore, the foreigners might have transferred their technologies if compelled to through strict laws governing joint ventures. But in the ever increasingly permissive “opening up” environment under the evil WTO, the foreign car companies would be stupid to give away their best technologies to nurture Chinese car companies which would ultimately out-compete the foreign car companies. Therefore, it is common sense to expect that the foreign car companies would simply drag their feet and do everything they can to evade the requirement to transfer their best technologies to their Chinese partners. In the end, the Chinese government has stabbed the Chinese companies in the back in joining the evil WTO which now makes it smart for the foreign car companies to evade technology transfer especially when they are looking forward to become competitors against their Chinese partners in due course of time as the evil WTO deliver the entire Chinese car market into their laps.

Given the increasingly permissive environment mandated by the evil WTO for greater opening up, it is obvious that when the Chinese car market is totally opened up, the Chinese car companies will not be in any fit position to compete against the big efficient foreign car companies. I have repeatedly warned against this. But many people don’t seem to understand the critical dangers impending. Now I am glad to see that at least some people are beginning to realize the horrendous danger confronting the Chinese car companies in the shadow of the evil WTO and are speaking out to warn against it. In the quote above, Jia Xinguang, chief analyst with China National Automotive Industry Consulting and Development Corp., had asked the reader to imagine what would happen if and when foreign car companies were allowed to control the majority share of joint ventures or even set up wholly owned subsidiaries. While he merely asked the question, it is obvious he expected the readers to understand that the result would be whole sale bankruptcies for the Chinese car companies which is exactly what I have been warning futilely since the Chinese government stupidly joined the evil WTO in 2001. I hope those people who thought I was being kooky in warning about the evil and dangers of the WTO would now ask themselves more seriously about the evil nature of the evil WTO in light of what perceptive people like Jia are now warning.

I have also advocated that the Chinese government immediately implement a policy to nurture at least 1 million science and engineering doctorates within 10 years in order to rapidly advance China’s technologies and enable the Chinese companies to go head to head in open competition against foreigners especially in car industry. From the article I referred to above, it is obvious that the main reason why Chinese car companies cannot achieve advanced technologies is that there are few Chinese scientists and engineers of the highest intellectual level and also there is a great lack of science and engineering research and development. Because of these reasons, the Chinese car companies cannot develop independently their own technologies and brands and must simply serve as factories and workshops to make cars whose intellectual properties are wholly owned by their foreign partners.

But even in spite of the fact that the large state owned car companies are turning themselves into factories and workshops for foreign car companies, there are a few small Chinese car companies that are hanging on and developing cars whose technologies are domestically owned. Some of these are China Brilliant Auto, Chery, and Geely. Unfortunately, the Chinese government is stabbing these small domestic car companies in the back also by forcing them to compete against big efficient foreign car companies such as GM, Toyota, and VW. It is obvious that the entire system of the current economic policy is discriminating against the Chinese domestic car companies. In other words, the Chinese government in joining the evil WTO and implementing subsequent economic policies is systematically forcing the Chinese companies into bankruptcies in favor of the foreign companies. Frankly, it pains me no end to see reported everyday about some one or another Chinese company got bought up by some foreign companies. It surprises me especially that these reports sounded like they are reporting some wonderful news when in fact the truth is it is reporting the slow demise of the Chinese economy and the slow but certain transformation of China into an economic colony. Chinese people must now rise up and speak out in one voice of righteous anger to condemn the evil WTO and those traitorous Chinese officials who have sold out and are continuing to sell out the rights and properties of the Chinese people to the very foreigners who have invaded and murdered tens of millions of Chinese people in the last centuries.

But in spite of the fearsome competition facing the Chinese domestic car companies, it is also clear that they are hanging on. This would immediately imply that the Chinese car companies, if given even just some minimal government help and more favorable economic policies would be able to become competitive in due time. But because of the ill advised joining of the evil WTO and the obviously discriminatory economics policies in general against the Chinese domestic companies including those in the car industry, the Chinese government has endangered the chances for survival let alone great prosperity of the domestic car companies.

In the final analysis, the Chinese government must adopt my 12 guidelines for the rapid advancement of China’s society and economy. Among my main points are the nurturing of the Chinese scientists and engineers and the expansion of science and engineering R&D, the immediate withdrawal from the evil WTO, trade by forming bilateral or regional trade agreements, and the shifting to the urbanization of the farmers as the main engine for the internal development of China‘s economy. To read my post on my 12 guidelines, please go to the following link which lists the 12 guidelines following comments on the use of China‘s foreign reserves:

http://www.network54.com/Forum/thread?forumid=238054&messageid=1085395333&lp=1085395333

If you can't compete, then you must die,that's the rule of the world, so face it.

And don't whine too much, anyway Chinese car industry is booming and a lot of new technology has been learned for advanced foreign car companies.

OPEN the door, face the competition of the entire world, nothing wrong with it.

Of course, the government should put more efforts to support local car companies.

my company, General Motors, is spending a lot of money developing our facilities in China. We see that as a growth market and have a strategic plan to build the business-especially in the Shanghai corridor. One of my friends just came back from a 6 year assignment over there.

E Tan, E Epi Tas!

But Landos, are those billions of dollars GM is supposedly putting into China for GM's benefit only, or will their Chinese partners (if they still have any) going to get a sizeable benefit?  Because if you look at Canada, GM and Ford "pour in" billions (most of which comes from government aid) of dollars into southern Ontario, yet Canada does not have a car industry of its own; it is all foreign owned.

If you can't compete, then you must die,that's the rule of the world, so face it.

There is nothing wrong with competition, but when these infantile Chinese companies go up against the established and experienced giants like GM, VW, Toyota, etc. in their home market, domestic Chinese companies are not competing, they are submitting.  As Chinese, you should realise there is nothing more humiliating than getting crushed in your own home.

And don't whine too much, anyway Chinese car industry is booming and a lot of new technology has been learned for advanced foreign car companies.

Booming for foreigners but not for Chinese-only companies lacking technology.  Canada's car market has also been "booming"; it's just too bad for Canada that there are no Canadian companies that exist.

OPEN the door, face the competition of the entire world, nothing wrong with it.

You don't open the door to predators, that is dead wrong.

Of course, the government should put more efforts to support local car companies.

Your previous remarks don't support this last sentence.

LOL Don't cry any tears here, the US has been assailed with a multitude of cheap Chinese-made products that we can't compete with because of our labor laws. Business is cut-throat, weakness will be taken advantage of.

Foreign companies are going to get money out of the Chinese boom, thats globalization for you.


Chevrolet Equinox's engine is made in China, they're taking advantage of the low wages.




"To secure the peace is to prepare for war." George Washington and later Metallica.

I said, don't whine too much.

Without learning and cooperation with foreign advanced car companies, Chinese car industry can't come so fat, like:

China is going to export cars to US market.
China has already started exporting cars to other countries, give it another 10 years, Chinese cars will roll everywhere.

Some of Chinese indignous cars:

Geely launched a new MeiRenBao version:
Heibao has a new 1.5L MRMR479QA engine developed by Geely. (69kw/6000rpm 128Nm/3400rpm) Plus some other modifications from MeiRenBao. It went on sale in the large cities yesterday @ 118800 RMB.








First Chinese car exported to USA
http://www.china-defense.com/forum/index.php?showtopic=1937&st=360&#entry137559



Shanghai car:


What's these cars??

LOL Don't cry any tears here, the US has been assailed with a multitude of cheap Chinese-made products that we can't compete with because of our labor laws. Business is cut-throat, weakness will be taken advantage of.

Exactly my point Apex, China is currently too weak to allow the US vision of "free trade" in China.  GM, Ford, Toyota and others, precisely because of their experience, will totally out-compete Chinese companies.

I like some of these designs.

How long before such Chinese designed and built cars are available in the U.S?

Heres an article about Chinese cars coming to the US:

A Chinese Chevy?
Experts say Chinese auto exports, with major Western brands, will eventually hit U.S. market.

NEW YORK (CNN/Money) - Clothes. Computers. Will cars be the next big Chinese import in the United States?

Experts say yes, it's inevitable that Chinese cars will eventually be a major force in the U.S. and other developed markets. But they say that while the cars will be made in China, they will likely carry very familiar Western brand names like Chevrolet, Honda and Volkswagen.

"If you look at mistakes they (U.S. automakers) made with the Japanese automakers, they missed their opportunity to partner with and be a controlling force behind Toyota and Nissan," said Denton Dance, director, emerging markets forecasts for J.D. Powers & Associates. "The global Big Eight are not going to sit by the side and let something big come into their home markets from China without being a part of it."


The Buick Sail rolls of a production line of a GM joint venture in China.

The major U.S. automakers such as General Motors Corp. deny they have any plans to sell vehicles now being built at their joint venture plants in China back in the United States. They say strong demand for autos in the Chinese market is swallowing up all Chinese production, and more.

"We're struggling to keep up with demand there," said General Motors Corp. spokesman Jerry Dubrowski.

Experts agree the growing Chinese market will delay any meaningful Chinese auto imports here. But they say the flood of investment by the Western automakers' new Chinese plants could create excess capacity in the coming decade, and create an incentive for exports, likely sometime in the next decade. Dance sees Chinese-made cars hitting the U.S. market 15 or more years down the road.

"They're going to do it (export cars to the United States) eventually," said Gary Silberg, partner with auditing firm KPMG's auto practice. "Their advantage will clearly be on the smaller, low-end cars."

Silberg and other industry experts say the agreements between the major global manufacturers and the largest Chinese automakers may stop the Chinese from ever having direct sales into the U.S. market.

"I don't see much advantage of them setting up a complete new network to sell the product in competition with their partners," said Max Pemberton, author of a recent study on the Chinese auto industry for London-based auto research firm Autelligence.

One U.S. auto industry executive, who spoke on condition that his name not be used, said that while he agrees the Big Three U.S. automakers don't have any immediate plans to sell their Chinese vehicles back here, that kind of export could make sense down the road.

"When it makes economic sense, it will happen," said the executive. "Every year the auto industry takes on a more global look. Manufacturers are going to go where they can produce quality vehicles most efficiently."

Industry experts point out that U.S. automakers have had trouble producing the low-price compact cars cheap enough to make money on them in the U.S. market. China, with state-of-the-art technology in its new plans and low labor costs, could allow the Big Three to compete more efficiently in that market, they say.

In January GM started to import its new compact car, the Aveo, that is being built in Korea by GM-Daewoo Auto and Technology Co., the joint venture formed after GM purchased the bankrupt automaker there. It has sold about 21,000 of the vehicles in its first six months in showrooms. Dubrowski said that unlike GM's Chinese investments, GM-Daewoo is being set up primarily to serve the export market, including shipments to China.
Coming to a dealership (not so) near you

The low price for Chinese cars is what Arizona businessman David Silburg said is leading him to try to import Chinese cars to the United States as soon as the end of this year. He is selling dealerships in his company, China Motor Corp., to sell cars from three different Chinese manufacturers.

"The price is what's going to do it," said Silburg. "People see these vehicles and they can't believe it -- it looks like a baby Mercedes with a $9,000 price tag."

But J.D. Powers' Dance said the manufacturers that Silburg is trying to bring in are the smaller Chinese automakers that don't have joint ventures with Western automakers. He said that while the quality of the Chinese-western joint venture autos is quite good, the quality of the regional Chinese automakers is significantly worse than U.S. or Japanese vehicles.

Investor: "To me that has Yugo written all over it," he said, referring to the much-derided and short-lived Yugoslavian import. "It's going to be a flash in the pan, some short-term hype, but I don't see it lasting."

http://money.cnn.com/2004/07/07/news/international/china_auto_exports/
-----------------------------------------------------------------------------------------------------------------------

Article quote to answer Padishah's question: "Dance sees Chinese-made cars hitting the U.S. market 15 or more years down the road."

Unless the Taiwan issue is resolved peacefully by then no way am I buying a Chinese car...




"To secure the peace is to prepare for war." George Washington and later Metallica.

"If you look at mistakes they (U.S. automakers) made with the Japanese automakers, they missed their opportunity to partner with and be a controlling force behind Toyota and Nissan,"

This key sentence says it all.  They want to control China, not alllow China to be strong on its own.  And that just proves the WTO is evil indeed.  Thanks for making my point!

Well yeah, we're just out to make money, thats what business is all about, and most businessmen are a$$holes anyway...

We want to make money instead of losing it, forgive us....




"To secure the peace is to prepare for war." George Washington and later Metallica.