China’s automotive rise: key to understanding globalization
Ding Gang
In 2003, I purchased my first car, a Japanese 2.0L model, for 230,000 yuan (approximately $28,000 at the time). Today, that same amount can buy a high-performance, technologically advanced Chinese electric vehicle (EV).
This stark contrast illustrates the rapid evolution and global competitiveness of China’s automotive industry. China’s vast road network now showcases a diverse array of global automotive brands, from German and American to Japanese and Korean. The remarkable growth of China’s EV sector is underscored by its global leadership in new-energy car sales, with more than 9 million units sold in 2023, maintaining its position for the ninth consecutive year.
The unprecedented rise of China’s automotive manufacturing and market openness reveals a unique development model. Understanding this model is crucial for grasping the true meaning of today’s globalization. The unstoppable development of China’s automotive industry is a clear and inevitable part of globalization, a trend that has predominantly been driven by Western industrial powerhouses until now.
China’s robust manufacturing foundation and comprehensive industrial chain support its automotive industry. With the world’s most complete manufacturing system and a skilled workforce, Chinese automotive companies maintain a leading edge in cost control and technological innovation. This transformation has propelled China from a poor country to a middle-income nation, allowing its citizens to enjoy the benefits of modernization.
While accelerating globalization, China is also reshaping the process of “human modernization.” By “human modernization,” I mean the improvement in living standards, access to technology and overall quality of life. China’s rise is not just about economic growth; it is also about how it’s improving the lives of its citizens and contributing to global progress.
China has compressed hundreds of years of Western industrialization into just 70 years. This rapid development inevitably impacts the global economy, geopolitical landscape, as well as the economic and social structures of developed Western nations. As a result, these countries have to make systematic adjustments.
Attempts to restrict Chinese manufacturing from entering global markets stem from a reluctance to accept China’s, or more precisely, the Chinese people’s path to prosperity. If China’s rise expands the global economic pie, why shouldn’t the Chinese people claim a more significant share?
The Western-dominated globalization of the past 500 years is undergoing a significant shift. Unprepared for this change, the West struggles to accept the alteration in its long-standing practice of extracting maximum benefits from the global economy.
US author Thomas Friedman’s concept that “the world is flat” makes sense from this perspective. However, achieving such “flatness” is far from simple.
This issue transcends economic theory; it’s about livelihoods. As workers in developing countries like China secure more stable jobs, can Western workers maintain their current standard of living? If the West truly believes in market economics and its universal applicability, it should allow market forces to decide. However, reality often diverges from this ideal.
Traditional industrial nations face the challenge of reforming their own systems during de-industrialization. They must recognize that ceding market share is inevitable and transform this pressure into a drive for enhanced competitiveness, rather than shifting the burden to developing countries lower in the supply chain. Fundamentally, this involves improving labor productivity and, more importantly, achieving convergence in labor costs.
The current governance systems in the US and Europe must improve their ability to address this issue. Instead, they’re exacerbating their own pressures. This explains why some US and European policies toward China and the strategies based on them are destined to lead to increased friction, conflict and lose-lose outcomes.
If current US and European strategic intentions persist, we may face a fragmented future where Americans drive American cars, Europeans drive European cars and Chinese drive Chinese cars. No country can thrive in a globalized world with fractured industrial and supply chains.
The West’s willingness to adjust its existing systems and redistribute benefits to provide more development opportunities for China and other emerging economies, rather than erect barriers or fragment industrial and supply chains, will ultimately determine its own future and the future of its people.
The writer is a senior editor with People’s Daily, and currently a senior fellow with the Chongyang Institute for Financial Studies at Renmin University of China
