The government manages the automotive industry to be responsible for symmetry

Dialogue character

Liu Shijin Deputy Director, Researcher, Doctoral Supervisor, Development Research Center of the State Council

Zhao Ying, Director of Industrial Development, Institute of Industrial Economics, Chinese Academy of Social Sciences, Professor, Professor, Graduate School

China Automotive News Wang Xin

"China Automotive News": The case of entering the market from Oaks and delisting can be seen from the current government in the car management problems? What should be the relationship between government's responsibilities and rights?

Liu Shijin: This incident reflects that the government still has certain deficiencies in the management of the automobile industry. In fact, the circumstances under which companies enter or exit the industry are the result of independent choice by enterprises and competition in the market. Government management should still be guided by the attitude of opening up the market and encouraging competition, and at the same time it must be bound by the enterprise itself, and the production and operation process of the enterprise. And the result bears some responsibility. When enterprises have problems and cannot continue to develop, what responsibility should the government and enterprises bear to minimize consumer losses? In this regard, corresponding regulations should be formulated.

Zhao Ying: Automobile management policies include not only maintenance and repairs, component supply, but also a series of laws and regulations such as safety, quality, and recall. Therefore, after the transition from the planned economy system to the market economy system, it is still necessary for the government to strengthen the management of the automobile industry to some extent. But there are two issues that must be made clear. First, the government must change management methods and regulatory roles. From the planned economy, the government's specific management of auto companies' investment and production shifts from the public interest and public welfare, and strengthens the public policies on automobile safety, environmental protection and consumer rights. management. Second, the access management of the automotive industry in China should be further refined and more maneuverable. Access management should be more reflected in the management of auto companies' production equipment, technical standards, product quality and product consistency.

In developed countries where the auto market is relatively mature, the responsibilities of the government are mainly focused on terminal management of vehicle quality, safety, and environmental protection, and there is a complete set of regulations to restrict it. As China is still in the transition period of the economic system, the government has not yet completely freed itself from the identity of the auto industry's investment subject. There is some arbitrariness in its rights space, and automobile management is still dominated by administrative means. Management policies are not fixed in the legal form. It has a lot of flexibility and is easily broken by the right means. In addition, there are many loopholes in the lack of laws and regulations and there are loopholes.

China Automotive News: What are the shortcomings of China's auto investment and financing system? What kind of investment and financing system is needed for the development of China's auto industry?

Zhao Ying: It should be said that China’s investment and financing system has made great progress. The state’s financial funds are no longer invested in principle. This avoids local governments from freely using taxpayer’s money to invest. Banks can also conduct investment and risk management on their own discretion. However, there are still some problems. First, some local governments also use fiscal funds to support local automobile projects. Second, the pressure from local governments on financial institutions still exists. Third, local governments provide land at a low cost by providing tax relief within the scope of their rights. By means of other means, the actual investment in the automotive project. In other words, the direct intervention of the central and local governments in the auto industry has not been completely eliminated.

Liu Shijin: In the past one to two years, the automotive industry in China has undergone great changes. Compared with the extraordinary development from 2002 to 2003, the current growth rate has slowed down significantly. The most important of these is the change in supply and demand. Investors have become more rational and calm, and the entire market has entered a balance between supply and demand and even oversupply. Under this circumstance, the government’s management of corporate investment can not only focus on the economic management of investment scale and production scale, but should shift its focus to the social aspects of product safety, environmental protection, energy conservation, and technical standards. Management will pay more attention to corporate social responsibility and prevent negative social effects caused by investment and production and business activities.

The focus of the reform of the financing system should be on resolving the financing difficulties of small and medium-sized enterprises and high-tech companies. We must treat both domestic and foreign companies, including private enterprises, and treat them fairly.

“China Automotive News”: In the transition period after China’s accession to the WTO and when the central government advocated for independent innovation, what changes should the government make in car management? How can more advantageous, self-owned brands and private enterprises participate in the development of China's auto industry?

Zhao Ying: From the loan of funds to the inclusion of government procurement, the Chinese government has already made significant changes to independent brand enterprises, but there are not many measures to directly encourage independent innovation. Financial institutions still have technical obstacles to private enterprises. Including the SASAC's evaluation of enterprises, they do not place the independent innovation capability in a dominant position, but only limit the assessment of corporate profits. This is in itself an unreasonable guide. The responsibility of the government is to be responsible to the public and its rights should be implemented within the scope of guaranteeing public welfare. At present, the government should draw a line between the two roles: the defender of the public interest and the business owner (or investor). Otherwise, excessive government intervention will lead to unfair competition in the market.

Liu Shijin: From the perspective of industrial development, the government must actively encourage innovation in an open environment. From the perspective of innovation, it includes both technological innovation and organizational and institutional innovation. Experience at home and abroad shows that if there is no corresponding organizational and institutional innovation, technological innovation will be difficult to push. Especially for domestic-funded enterprises and newly-emerged companies with domestic capital, the government should give appropriate support in line with the basic requirements of WTO.


Source: China Automotive News

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