China’s giant automobile market continues to grow robustly, but its once thriving domestic producers have lost ground recently to global auto giants such as Volkswagen and GM. The excessive optimism of the past, however, has given birth to unwarranted pessimism about the future. The tangled legacy of China’s automotive policy has created numerous dilemmas, but it has also helped to create significant capabilities. A comparison of developments in China with those of other developing economies in East Asia suggests that institutions for promoting industrial upgrading have played a significant role in enabling some countries, such as China and South Korea, to deepen their industrial bases, while others either remain limited to assembling foreign models (as in Thailand and now Indonesia) or have failed to develop a sustainable automobile industry at all (as in the Philippines and even Malaysia). China faces tough policy choices, but it is likely to move, however reluctantly, in a more liberal and competitive direction.

Gregory W. Noble’s specialty is the comparative political economy of East Asia. His many publications include “The Chinese Auto Industry as Challenge, Opportunity, and Partner” in The Third Globalization (2013); “Japanese and American Perspectives on Regionalism in East Asia,” International Relations of the Asia-Pacific (2008); “Executioner or Disciplinarian: WTO Accession and the Chinese Auto Industry,” Business and Politics (co-authored, 2005); The Asian Financial Crisis and the Architecture of Global Finance (co-edited, 2000); and Collective Action in East Asia: How Ruling Parties Shape Industrial Policy (1999). After receiving his Ph.D. from Harvard University’s Department of Government, he taught at the University of California and the Australian National University before moving to Tokyo.