AnnalsoftheAssociationofAmericanGeographers,90(4),2000,p.653–673©2000byAssociationofAmericanGeographersPublishedbyBlackwellPublishers,350MainStreet,Malden,MA02148,and108CowleyRoad,Oxford,OX41JF,UK.RestructuringandSpatialChangeofChina’sAutoIndustryunderInstitutionalReformandGlobalizationVictorF.S.Sit*andWeidongLiu***DepartmentofGeography&Geology,UniversityofHongKong**InstituteofGeography,ChineseAcademyofSciencesThispaperemploysanembeddednessapproachtostudytherestructuringandspatialchangeofChina’sautoindustrysincethe1980s.Thetwomajordynamicsbehindtheseprocessesaredis-cussedindetail:(1)institutionalreform,whichhasresultedinamixedregulationmechanismcomposedofbothmarketcompetitionandlegaciesofthepastcommandeconomy,andwhichhasalsoallowedmorefreedominthedecisionmakingofindigenousautofirms,and(2)globalizationofproductionintermsofahugeinflowofforeigndirectinvestment(FDI),mainlyintheformofjointventures.Asaresult,anewgeographyoftheindustryhasemerged,withclearfeaturesofde-centralizationofproductionandashiftofproductiontowardthecoastalregion.Thepapercon-cludesthatthegradualinstitutionalreforminChinahasledtoa“path-dependent”developmentofitsautoindustryandthatauto-producingFDIhasbeendeeplyembeddedintheChineseinsti-tutionalenvironment.ThisinvolvementinChina’sautoproductioncanbeaptlydescribedas“embeddedglobalization.”KeyWords:China,autoindustry,industrialrestructuring,FDI,em-beddedglobalization.heautoindustryisoneofthesectorsmostfrequentlystudiedbyindustrialeconomists,geographers,andbusinessanalysts.Inthepast,theindustrywasconsideredaclassicexampleofthegeographicevolutionofanindustryfromextremeconcentrationtomarkeddecentralization(Schoenberger1987).Beforethe1980s,itwasapopularstrategyformajorautomakersotherthantheJapanesetosetupbranchplantsinperipheralregionsforbothpartsmanufacturingandassembly,whichwasbestrepresentedbytheworldcarmodel(Maxcy1981;Rubenstein1992).Sincethe1980s,how-ever,theindustryhasexperiencedanewwaveofspatialrestructuringduetothespreadof“leanproduction”(Womacketal.1990).Thenewjust-in-time(JIT)parts-sourcingstrategyofleanproductiontendstocausespatialreconcentra-tionofproduction,asproximitybetweenassem-blersandsupplierscanreducetransactioncosts.Meanwhile,increasingglobalizationofpro-duction,mainlyintheformofforeigndirectin-vestment(FDI)ofmultinationalcorporations(MNC),hasactedasanothermajorforceintherecentspatialrestructuringoftheindustry.The1980switnessedatransitionfromFDItoprotec-tionismintheworldautomarket.Eveninthedevelopedcountries,defensivemeasureswereusedtoprotectautosectors(Chaudhuri1989).Forexample,JapanwasrequiredbytheU.S.topracticevoluntaryexportrestraints.Thesemea-suresforcedauto-producingMNCstoinvestandbuildcarsinhostcountries,insteadofjustexportingcomplete-built-up(CBU)vehiclestothem.Bytheearly1990s,overseasoutputofma-jorauto-producingMNCshadaccountedformorethanone-thirdoftheirtotalvehiclepro-duction.SuchFDIinflowhascausedsignificantchangesinthegeographyofautoproductioninhostcountries.Forexample,sincethe1980s,JapaneseautotransplantshaveplayedakeyroleinthespatialchangesofautoproductionintheU.S.(Mairetal.1988;Reid1990).Theautoindustryshowsanobviousoligopo-listicfeature,asafewMNCshavedominatedproductionandmarkets.Besides,theindustryconstantlyevolvesnewtechnologiesinsafety,pollutioncontrol,energy-saving,andotheras-pects.Thecombinationofthesetwofactors...
