ABSTRACT
The first two chapters of this book presented an account of China’s indigenous large-scale sector based around the emergence of large enterprise groups in pillar industries under the influence of state policy. Chapter Two showed how the role of the large-scale sector in China has generally been poorly understood even though it has played a significant role. Chapter Three, moving on from this, isolated what it considered to be a small number of state-supported enterprise groups, the 120 large preferred enterprise groups of the national team. These are of growing importance to the large-scale sector. It described the background to their selection, reasons for ‘grasping the large’ and policies related to their institutional transformation. These chapters also showed that the State Council explicitly declared a number of reasons for promoting the national team of enterprise groups, including salvaging small-scale industry, promoting macroeconomic stability, reducing replication and increasing scale. Since the second national team enterprise group directive in 1997, however, it is important to stress an overriding policy goal has been to further the creation of a small number of internationally competitive groups. The 1997 State Council enterprise group directive, as Chapter Three showed, explicitly recognized that a ‘crucial stage’ had been reached in which the industrial growth pattern had ‘transformed from extensive growth to concentrated growth’. The directive also recognized that ‘as opening to the outside continues enterprises will face more severe domestic and international competition’. China still has high expectations of developing successful groups in assembly and component manufacture. Industry-specific measures to promote group development have been
implemented in the auto industry. As a result, it is a particularly interesting case to consider the question of catch-up at the level of the large enterprise. This is especially so in the light of the revolutionary change that has taken place in the global auto industry in the past few years. The global giants now emerging are eager to increase their market shares across all markets, particularly by way of the fast growing Asian market. This poses enormous challenges for China’s indigenous auto industry.
