Environmental Engineering Reference
In-Depth Information
Shanghai Automobile Industry Corporation (SAIC). These two pioneering foreign
investments blazed the trail for all others that followed. Much later, General Motors even-
tually formed a joint venture with VW's same partner in Shanghai, and
nally Ford Motor
Company made its own foreign investment after China entered the World Trade
Organization around the turn of the century. Now, all major foreign automobile
fi
rms are
heavily invested in China. In this section, the environmental impact of the FDI for each
of the three Sino-US joint ventures described during the period of 1984-2002 above will
be evaluated drawing on a larger topic on this subject (Gallagher, 2006a).
Beijing Jeep Corporation (BJC) was the
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rst Sino-foreign automobile joint venture in
China. Originally a joint venture of AMC and BAW,
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rst Renault and then Chrysler took
over the US side of the joint venture. The Chinese partner remained the same, although
BAW's parent, Beijing Automobile Industry Corporation (BAIC), eventually dissolved
and absorbed BAW when it consolidated. The motivations for the joint venture greatly
diverged between the two partners. AMC saw China as the next huge passenger car
market, forgetting that most of China's one billion consumers at the time were far too
poor to buy a car. BAW, and the Chinese government more broadly, was anxious to
acquire a modern, soft-top all-terrain vehicle for military purposes. The older model cur-
rently available in China, the BJ212, had been transferred to China by the Soviet Union
before the Sino-Soviet split. BAW was the primary producer of these vehicles that served
the Chinese military. The Chinese government was also experimenting, through BAW, the
idea of developing a world-class automobile industry, even though there was much debate
then within the Chinese leadership about whether or not it would be possible for China
to catch up to the rest of the world given how far behind they were after the Cultural
Revolution.
After much debate, AMC accepted a minority stake in the joint venture for a term of
20 years, and agreed to transfer AMC's Jeep Cherokee XJ model. This technological
choice was a compromise solution because AMC refused to redesign any vehicles for the
Chinese market, so the Chinese desire for a soft-top model, for example, was denied. The
old model, the BJ212, was to be continued temporarily. There were no provisions for envi-
ronmental or energy-e
fi
cient technology transfer. Thus, for nearly 20 years, all of the
Beijing Jeep models were sold without any pollution control technology such as catalytic
converters whatsoever. In addition, because the old BJ212 was so much cheaper, it con-
tinued to be sold for the next two decades and, actually, to be the top-selling model. Once
China imposed its
rst vehicle emissions control standard in 2000, Beijing Jeep introduced
Euro 1-level technology. Because Beijing had a more stringent standard, the Euro 2 stan-
dard, Beijing Jeep had to bring its vehicles into compliance as well and by 2003, all of the
Beijing Jeep vehicles purportedly met the Euro 2 standard.
Shanghai GM was formed in 1997 as a partnership between the Shanghai Automotive
Industry Corporation (SAIC) and General Motors (GM). GM aggressively pursued this
joint venture because SAIC was considered to be one of the most successful and pro
fi
fi
table
Chinese automotive
rms. Like all other foreign investors, GM was anxious to get into
the Chinese market because it saw it as a big growth opportunity. In 1994, the Chinese
government had
fi
rst Auto Industry Policy, which strongly emphasized
enhancing the indigenous technological capabilities of the Chinese industry through tech-
nology transfer, so GM knew it would have to respond to this policy. GM transferred to
China by far the most advanced technology to date of any foreign investor. As mentioned
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nally issued its
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