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Fragmented Liberalization in the Chinese Automotive Industry: The Political Logic behind Beijing Hyundai's Success in the Chinese Market*

Published online by Cambridge University Press:  22 October 2013

Seung-Youn Oh
Seung-Youn Oh*
Affiliation:
Bryn Mawr College, Pennsylvania. Email: [email protected].
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Abstract

This paper explains the extraordinary rise of the Beijing Hyundai Motor Company (BHMC), a joint venture between a state-owned enterprise run by the Beijing municipal government and Hyundai Motor Company. Within the span of three years, the BHMC soared to become China's second-ranked automotive manufacturer in terms of units sold. I highlight the role of the Beijing municipal government in creating favourable market conditions for the BHMC during its initial operation phase (2002–2005). The Beijing municipal government selectively adopted protectionist measures and liberalizing measures to promote its locally based company. I characterize this practice as fragmented liberalization, a system through which sub-national governments discriminately apply WTO or central government regulations to promote their local joint venture partner. In so doing, I also challenge the existing assumption that multinational companies are the drivers of economic liberalization, by showing Hyundai's support for local protectionism and industrial policy at the sub-national level.

Keywords

World Trade Organizationliberalizationlocal government industrial policystate-owned enterprisesauto industryBeijing Hyundai
Type
Articles
Information
The China Quarterly , Volume 216 , December 2013 , pp. 920 - 945
Copyright
Copyright © The China Quarterly 2013 

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Footnotes

*

I would like to thank Vinod K. Aggarwal, John Ravenhill, Bai Rangrang, Jennifer Choo, Chris Sullivan, Rongbin Han and John Yasuda for commenting on various drafts of the paper.

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