Ministry of Science and Technology: Building its own brand based on parts and components
In recent years, He Jixiang, Director of the Research Office at China's Ministry of Science and Technology, highlighted a growing concern during the 2006 China Automotive Engine High-Level Symposium. He pointed out that multinational corporations are increasingly taking control of domestic industries, particularly in construction machinery, which has become a focal point for foreign investment and acquisitions.
He noted that reports from Hualing Heavy Truck to government departments have drawn significant attention. As one of the fastest-growing sectors in China, the construction machinery industry is dominated by multinational firms. Leading Chinese companies such as Xugong, Liugong, Sany, and Zoomlion have already achieved global recognition in terms of technology and scale. However, with the acquisition of XCMG by a French private equity firm, the trend of foreign investment in this sector is accelerating, posing challenges for local enterprises.
He also emphasized the importance of independent innovation in the automotive industry, especially in developing low-energy and new energy vehicles. The focus should be on alternative fuels, hybrid systems, and fuel cell technologies, alongside advancements in powertrain integration, high-efficiency engines, and battery technology.
China has made progress in its auto parts industry, with exports surpassing imports for the first time in 2005. Despite still lagging in value-added production, this achievement marks a positive shift. However, the industry faces intense competition, as many core components remain dependent on foreign suppliers.
The Korean automotive experience offers valuable lessons for China. After visiting South Korea, officials recognized the importance of strategic development and long-term planning. Currently, only 28% of China’s annual car output is from domestic brands, highlighting the need for stronger national branding.
Experts at the symposium stressed the importance of shifting away from GDP-centric evaluations and instead focusing on technological development and brand building. They argued that current performance metrics often prioritize short-term profits over innovation, leading to a lack of incentive for R&D.
Some experts warn that China’s overemphasis on GDP has led to environmental degradation and fails to reflect true economic growth or improved living standards. In contrast, countries like Britain, where government support was lacking, saw their automotive industry decline.
Despite these challenges, there is hope. While public trust in domestic brands remains low, efforts to strengthen independent innovation and national identity continue. The path forward requires sustained investment, policy support, and a long-term vision to build a strong, self-reliant industrial base.
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