China's Auto Industry And The Interaction Of The Financial Industry Development

Since 2009, China has become the biggest country in producing cars. But there are also problems urgently to be solved in the industry. Such as economies of scale not obvious and still in the low-end of the value chain, etc. How will the auto industry be in the future? This paper argue that putting financial facts into the auto industry value chain can make the development of car industry and the development of financial industry interact with each other. The interaction can contribute to the solving of the above problems. At the same time, that can make up the problems faced in the development of financial industry, such as shortage of financial innovation and lackage of innovation, etc.In this paper, we expounds the necessity of interactive development of auto industry and financial from the theoretical perspective firstly. Based on industry value chain theory, we reveal the internal mechanism of the interactive development of auto industry and financial industry. Next, in order to make our auto industry better we want to know whether interactive development of both industries can help according to the theories put in the second chapter. Then by reconstructing value chain of automobile industry, we analyzed how they interactively develop and discussed the ways that they can choose.Next, we will depend on VAR model to carry out the empirical analysis.First, we choose the proper variables according to the related research. Second, we carry out the stationarity test, cointegration analysis and VAR analysis. Results show that Chinas auto industry and financial industry in the development process present interactive situation gradually, but that is not perfect. This paper argues that the situation dues mainly to China's automobile financial development's imperfection. So we should vigorously develop our credit information mechanism, improve auto financial entrance system and supervision system, regulate the business operation standard of auto financing and vigorously develop automobile financial industry.