Global Value Chain Of Foreign Direct Investment In China's Automobile Industry,

Today, the automotive industry is a kind of typical globalization industry: Looking for and allocating resources in the whole world. As the globalization process of the automotive industry is speeding up, there are some unprecedented vertical separation and reconstruction of the global automotive value system. On one hand, the developed countries transfer their focus from manufacture to technology research, innovation, and marketing, which are becoming more value-added parts. More and more enterprises are focusing on their core functions. On the other hand, the developing countries get the unprecedented opportunities to develop, due to the manufacture function transfer from the developed countries, but also face the problem of industrial upgrading.There are producer-driven, buyer-driven, and mix-driven value chains in the global industry transfer and new division of world functions, and the route of industry updating is not the same with different driven systems. In addition to that, the updating process is also effected by the types of governance in global value chains. They are: markets, modular value chains, relational value chains, captive value chains and hierarchy. If we do the research from the perspective of value chain, it is necessary to understand the industry value chain, as well as the driven and governance type.With the industrialization process, the automotive industry has become a pillar industry of national economy in china. Over the past 30 years, a large amount of Foreign Direct Investment (FDI) has been attracted to China's auto industry under the"Exchanging Market for Technology" policy. The auto industry has made great progress in terms of product scale and product structure, there is a substantial increase in the overall economic benefits and the domestic auto market has boomed and basically met the market demand both at home and abroad. However, there are many problems in the auto industry in China, such as: Technology-dependent, weak parts and components industry, the lack of self-innovating brands, and so on. Auto industry of china has always been at the low value-add level. The focus of traditional research is the automobile, ignoring the trend of value chain globalization. On the basis of such train of thought, This paper uses the theory of global value chain to empirical analyze the impact of Foreign Direct Investment on China Auto Industry, based on the value-added model of auto industry. So that it can develop some strategies to upgrade the auto industry of China with the help of FDI.First of all, the paper makes a literature review and some definitions of relative concepts, mainly including the driven system of global value chain, governance of global value chain, and industry updating theory; then it summarizes the formation and trends of the global automotive value chain and outlines the history of Foreign Direct Investment getting into the auto industry in China. With the theory of global value chain ,we empirical analyze the impact of Foreign Direct Investment on China Auto Industry, based on the value-added model of auto industry. Finally, some strategies to develop the auto industry in global value chain with FDI are brought out at the basis of the above analysis.