Changing Lanes in China
Foreign Direct Investment, Local Governments, and Auto Sector Development

This book explains at the regional level how China has used foreign direct investment to promote local development.

Eric Thun (Author)

9780521843829, Cambridge University Press

Hardback, published 16 January 2006

344 pages
23.5 x 16 x 2.7 cm, 0.601 kg

'This book is a valuable addition to a growing literature on the roles of foreign direct investment (FDI) and local governments (LGs) in China's industrial development. … A major strength of the book lies in the successful integration of its analytical framework and its case material. … the book produces interesting new research questions.' The China Journal

This book addresses two of the most important trends in political economy during the last two decades - globalization and decentralization - in the context of the world's most rapidly growing economic power, China. The intent is to provide a better understanding of how local political and economic institutions shape the ability of Chinese state-owned firms to utilize foreign direct investment (FDI) to remake themselves in the transition from inefficient and technologically backward firms into powerful national champions. In a global economy, the author argues, local governments are increasingly the agents of industrial transformation at the level of the firm. Local institutions are durable over time, and they have important economic consequences. Through an analysis of five Chinese regions, the treatment seeks to specify the opportunities and constraints that alternative institutional structures create, how they change over time, and ultimately, how they prepare Chinese firms for the challenge of global competition.

Part I. Introduction: 1. Local governments, FDI, and industrial development
2. The view from the center
Part II. Development in a Protected Market: 3. Coordinating development in the auto sector
4. Shanghai: a local development state
5. Beijing and Guangzhou: laissez-faire local states
6. Changchun and Wuhan: firm-dominated localities
Part III. Deepening Global Integration: 7. Global integration and the challenge of upgrading
8. Growth, change, and the challenge of governance
Part IV. Conclusion: 9. Local institutions in a global economy.

Subject Areas: Political economy [KCP], Development economics & emerging economies [KCM], International economics [KCL], Politics & government [JP]