He Guangyuan:China Should Be Cautious About

　　On September 3, 2010, China Automotive Industry Development Forum, which enjoys a good reputation of "Davos Forum in Automotive Industry", was held in Binhai New Area in the city of Tianjin. The representatives from government, automotive industry and automobile manufacturers carried out in-depth discussions through diversified conference patterns. The annual theme for the forums is "transformation and upgrading of China's automobile industry". More than 600 government officials, industry leaders, experts and scholars participated in the forum. On the spot Sohu Auto had an exclusive interview with He Guangyuan, the former Minister of Machine Industry.

　　What is the current situation of China's automobile industry? Compared with the world's advanced level, China is still left far behind in several fields, especially in terms of some core technologies. This problem exists in both traditional vehicles and new energy vehicles.

　　He Guangyuan believed that on the basis of establishing joint ventures in the preliminary period, China's automobile industry should take an independent and open path of development. China's auto industry should not follow an open and dependent route.

　　China's auto industry is in need of upgrading and restructuring in three areas. First of all, the upgrading of core technologies is necessary. Secondly, concept and idea should be changed. Third, management experience should be enhanced in terms of two levels-the management of automakers and management of auto industry.

　　On September 3, Sohu Auto interviewed with He Guangyuan, the former Minister of Machine Industry during the China Automotive Industry Development Forum. He shared his views on several issues including the 12th Five-Year Plan, upgrading and restructuring of China's auto industry, development of new energy vehicles, entrepreneurship, "market for technology" and etc. The contents of interview are as follows.

　　China should a clear idea about auto industry prior to upgrading and restructuring.

　　He Guangyuan believed that the so-called upgrading is more like a conceptual formulation. Before talking about the issue of upgrading and restructuring of China's auto industry, we should understand the current situation of China's auto industry in the context of global economic integration. Then we will be able to discuss the issues about how to complete the upgrading and restructuring works.

　　Nowadays China has become the largest auto market across the globe. He Guangyuan said that such an advantage can be an important resource for China's auto industry. We should carry out some studies about how to make good use of the resource to develop China's auto industry.

　　He Guangyuan expressed his thoughts about the current situation of China's auto industry. Compared with the world's advanced level, China is still left far behind in several fields, especially in terms of some core technologies. This problem exists in both traditional vehicles and new energy vehicles.

　　China's auto industry is in need of upgrading and transformation in three fields.

　　First field is the upgrading of core technologies. Over the past few decades, China's auto industry introduced a number of joint ventures, a practice which is named as market for technology. At first, China introduced technologies, capitals and products from foreign countries and made good use of those resources. However, China failed to absorb those technologies after "digestion". As to a lot of core technologies, China has to depend on continuous introduction to solve the problems. China is not able to rely on its original development.

　　At present, compared with the international advanced level, China's automobile manufacturing technology is still left far behind in a number of fields. The most important solution is to form independent development capacity through exercise. China should not depend on taking a shortcut and bringing other approaches. Even though we have to bring other approaches, we should digest and absorb the technologies and then engage in innovation.

　　In addition, China's auto industry is in need of ideological change. He Guangyuan believed that based on the establishment of joint ventures, China's auto industry should follow an independent and open path rather than an open and dependent path.

　　However, the current situation is that the leaders of a large number of automobile manufacturers have developed a kind of inertia. They believe that setting up joint ventures is the easiest choice with few risks and huge profits. They are eager to gain the profits as soon as possible. Though the leaders of domestic automobile manufacturers can get great salaries, majority of the profits are taken by foreigners. However, China's domestic automakers still believe that it is a good way to get money via a steady method. Independent research is a risky choice which requires great efforts. However, such kind of concept is extremely harmful for the sustainable and healthy development of China's automobile industry.

　　In recent years, China attached great attention to the significance of innovation and building of an innovative country. The self-development capacity of China’s automobile manufacturers has been greatly improved. Some entrepreneurs have done a good job in the field of innovation and their spirits deserved admiration. However, as to the level of national policy, China's emphasis on innovation is more like a promise. There is a lack of support for innovation regarding several fields including system, mechanism and capital.

　　He Guangyuan believed that in order to promote independent innovation and development of core technologies, government should introduce more concrete stimulus policies as well as repeating the slogan of encouraging innovation. China should establish an effective system and mechanism for self-development. When devising the 12th Five-Year plan, China should consider how to solve these issues.

　　In addition to the above two points, the upgrading and restructuring of China's auto industry also includes the upgrading of management experience which covers two levels-management of auto manufacturers and auto industry.

　　The fever of new energy vehicles is like Great Leap Forward which happened in 1958. We should be cautious about the issue.

　　For the past two years there is a booming trend in the field of electric vehicles. A number of government departments are in charge of automobile industry and some auto enterprises are at a loss. The fever of new energy vehicles is like Great Leap Forward which took place in the year of 1958, according to He Guangyuan. Various places and auto manufacturers are engaged in the development of new energy vehicles. They are busy introducing new projects. However, some automakers depend on purchasing core components and assembling them. Then they can enjoy the state's subsidy policy. There are few companies which have core technologies. These phenomena are worthy of attention.

　　He Guangyuan did not agree with some views such as China is at the same starting line with other countries in terms of the development of new energy vehicles. Though recently those ideas are quite popular, the real situation is entirely not the case.

　　For example, battery technology is one of the core technologies. Till now China has not been able to master the high-level and safe battery technologies which may help China to produce batteries in large quantities. China has more notions about motors compared with batteries. However, China has not managed to produce motors in a large scale and establish the industry. The situation in electronic control system is even worse.

　　In addition, the sources of electricity will also affect the energy efficiency of new energy vehicles. According to the statistics provided by National Energy Board, renewable energy accounted for 8.3% in China's total energy consumption. Renewable energy includes hydropower, wind power, solar power, geothermal energy and biomass energy. Fossil fuels accounted for the remaining 91.7 %. As to the composition of electricity, more than 70% electric power was generated from goals. Moreover, the consumption of energy in the whole process has not been measured by anyone.

　　He Guangyuan believed that in the following decade, internal combustion engine will still play a dominant role. This is a major trend. Therefore we should spare no efforts to upgrade the traditional internal combustion engine. (Translator: Qinghua/Hanxin)

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