Former Vice Minister of China's Ministry of Foreign Trade and Economic Cooperation and Secretary-General of the Boao Forum for Asia, Long Yongtu, recently attended the China (Xingsha) Corporate Culture Forum in Changsha, Hunan Province. As the main figure of China's WTO accession negotiations, recalling the difficult course of negotiating automobile clauses in the past, Long Yongtu's expression seemed helpless. He said: "It seems that many of our efforts at that time did not play a significant role. We greatly underestimated the development capabilities of the Chinese auto industry."
The pressure to protect the auto industry was once very high
Long Yongtu introduced China's accession to the WTO talks. He said that the automobile industry has long been protected by the state and foreign countries have paid special attention to China's huge auto market. Therefore, in the negotiations on accession to the WTO, the automobile was once one of the most difficult main battlefields. Three years after joining the WTO, it seems that many efforts at that time did not play a significant role. We ourselves greatly underestimated the speed of development of the Chinese auto industry and its ability to compete in the international market.
Long Yongtu said that one of the focuses of the negotiations was when to cancel the quota license for imported cars from China. Many people put pressure on them, saying that the quotas for cars must be firmly protected and the longer the protection, the better. Some people gave them a bottom line that at least China's auto import quotas should be retained until 2010. People in the industry know very well that China's automobile industry is not protected by protection, but at the time that kind of protection was very strong. Western developed countries, especially the United States, hope that China will immediately cancel the protection of licenses on the day of entry into the WTO. Later, after arduous negotiations, the time for cancelling import quotas was finally fixed on January 1, 2005. At that time, we reached an important consensus that January 1, 2005 was the day when the entire World Trade Organization textile import license was finally cancelled. This day must also be the day when China's import car quota license management ends.
A day that is not worth fighting for
Long Yongtu said that now it seems that January 1, 2005 is not a very worthwhile day, because I heard that this year's car quota permit has become like a piece of waste paper. When a car import quota was worth tens of thousands of yuan, it was not difficult to understand why so many people at that time had to firmly maintain the import quota license. Let Long Yongtu feel relieved that the cancellation of car import quota permits will allow those corrupt officials who have fallen quotas to rest! The decline in auto import tariffs after China's accession to the WTO has stimulated a large price cut in the Chinese auto market, which has turned many Chinese car dreams into reality. Even more gratifying is that the Chinese auto industry has grown rapidly.
China wants to become a major producer of spare parts
Long Yongtu said that everyone is very concerned about the trend of China's auto industry after its entry into the WTO. We must study it under the background of economic globalization.
Economic globalization has two trends in China: one is the transfer of global industries to mainland China; the other is the shift of rural Chinese population to cities. The first trend includes the transfer of the automobile industry to China. This shift has made China's auto production chain and supply chain an important part of the global automotive production chain and supply chain, enabling many companies to achieve global production. China has participated in the competition of the global automotive industry and must attach great importance to the production of auto parts. China can't be just an assembly shop for the world autos. What's more important is to become a production base for auto parts so that it can have its own position in the global auto industry. Not only low-value, low-tech parts and components, but also high-value-added parts must be produced, and the Chinese automobile industry must be based on a large-scale production of parts and components.
Now the global auto giants are investing in China. This situation is extremely beneficial to the Chinese automobile industry and to Chinese auto consumers. Because China’s own strength alone cannot catch up with the world’s advanced level in the short term, it must achieve strategic alliances with world-leading companies, train themselves in the alliance, and gradually form its own independent research and development capabilities, including the R&D and production of parts and components. During the negotiations on accession to the WTO, China has also insisted on another bottom line, that is, the shares of Chinese-foreign joint ventures invested by the Chinese party must not be less than 50%, and the foreign party can not have control. This ensures that Chinese auto companies have their own voice in the alliance with the world's auto giants and have their own dominance.
Car plays an important role in the process of urbanization
Speaking of the impact of cars on China, Long Yongtu said with enthusiasm that the transfer of rural population to cities is very beneficial to China's industrialization, modernization, and adjustment of the entire economic structure. If we do not transfer hundreds of millions of farmers to cities, China cannot become a major automobile country in the 21st century. There are now six major cities around the world. One of the cities in the middle and lower reaches of the Yangtze River in China is one of them. We should develop more big cities. In this process of transfer, the car will play a key role.
The blood connecting big cities and small and medium-sized cities and rural areas is the highway, and the highways are running cars. Only the development of the auto industry can form a true urban belt, which is of great significance to China's economy. From this perspective, the future of China's auto industry is limitless. Like the United States, Chinese cities will establish automobile-centric service industries, including automobile retail, wholesale, insurance, loans, gas stations, maintenance, and spare parts supply, which will create a large number of job opportunities. Employment opportunities created by the US automotive industry account for 5% of the total employment. If China's urban population is 250 million, fostering the auto industry and auto market can create 10 million jobs. In China's urbanization, modernization, and economic restructuring, an important task is to create job opportunities. In this regard, the automobile industry can play an important role.
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