Volkswagen Cars, Politics, and Culture in the Post-1978 China: the Social Construction of Success
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Volkswagen Cars, Politics, and Culture in the Post-1978 China: The Social Construction of Success Xiaolan Qiu Dissertation submitted to the faculty of the Virginia Polytechnic Institute and State University in partial fulfillment of the requirements for the degree of Doctor of Philosophy In Science and Technology Studies Timothy W. Luke (Chair) Daniel Breslau Ellsworth Fuhrman Saul Halfon February 13, 2012 Blacksburg, Virginia Keywords: Volkswagen, Shanghai-Volkswagen, technology policy, sociology of technology, China Volkswagen Cars, Politics, and Culture in the Post-1978 China: The Social Construction of Success Xiaolan Qiu ABSTRACT Volkswagen (VW) is one of the first foreign carmakers that made direct investments in China after 1978. From its entry in the Chinese market to the year of 2009, VW enjoyed popularity, high reputation, and undisputed leadership in the Chinese passenger car market, and achieved a great commercial success. Most previous accounts attribute VW’s success in China to VW’s wise business operation or Chinese government’s support. This study guided by the methods and theories of technology studies, especially the actor- network theory (ANT), takes into account technical, socioeconomic, political, or cultural factors simultaneously. By selecting one of VW’s successful joint ventures with China – Shanghai Volkswagen (SVW) – as a case to do in-depth investigation, it examines the relationship between heterogeneous actors (both humans and nonhumans) and the pathways of SVW development, and has found that all of the SVW establishment, production, marketing, and development were shaped by a range of diverse social and material actors, including the central planners, local government, VW, local suppliers, Chinese consumers, and VW cars, and depended on Chinese particular political and cultural context; VW’s success in China presents a story of co-construction of power and actor-networks. Acknowledgements First and foremost, I should thank my advisor Dr. Timothy Luke for his continuous support for my PhD study and his generous advice and comments on my research. Since I worked on my dissertation on the extended campus and could not communicate with him face to face, he spent a lot of time writing down his comments on my dissertation drafts. While English is not my native language, Dr. Luke had to deal not only the content of my work but with its grammar as well. Without his time, help and support, this dissertation would not be worked out. I owe another debt of gratitude to my parents, especially my father who not only encouraged and supported me to finish my PhD study even when I was disappointed and wanted to quit the program, but also took advantage of his position in the government to provide my project with some valuable official documents most of which are not accessible to the public. I also want to thank the staff of Yantai University Library for their help with my research by offering me a free account of Chinese online database which makes me search and browse most of digitalized Chinese newspaper, journals, and magazines. I am of course much indebted to each and every one of my committee members who gave me some valuable suggestions and comments on this project when I was working on both the proposal and dissertation draft. Their thoughtful engagement made this dissertation much better. Finally, I would like to say “thank you” to my husband and my daughters – iii Nancy and Cindy. Accompanied by all of you, I got over the hardness when doing the research, and completed this project. I appreciate your support and patience greatly. iv Table of Contents ABSTRACT ACKNOWLEDGEMENTS ........................................................................................................................... III LIST OF FIGURES ..................................................................................................................................... VII LIST OF TABLES ...................................................................................................................................... VIII LIST OF ABBREVIATIONS ......................................................................................................................... IX CHAPTER 1 INTRODUCTION ..................................................................................................................... 1 1.1 LITERATURE REVIEW .................................................................................................................................. 4 Previous research .................................................................................................................................. 4 Theoretical Framework of This Study .................................................................................................... 8 1.2 RESEARCH METHODS ............................................................................................................................... 17 1.3 THE LIST OF CHAPTERS ............................................................................................................................. 19 CHAPTER 2 THE FOUNDATION OF SHANGHAI-VOLKSWAGEN ................................................................ 22 2.1 BACKGROUND OF THE SVW PROJECT ......................................................................................................... 24 Chinese Car Production Before 1978 ................................................................................................... 25 Central Government Control in the Auto Sector ................................................................................. 29 2.2 AUTO JOINT VENTURE ENTERING CHINA...................................................................................................... 34 2.3 WHY VOLKSWAGEN? ............................................................................................................................... 36 2.4 NEGOTIATION FOR THE JOINT VENTURE AGREEMENT ..................................................................................... 43 SUMMARY AND ANALYSIS ............................................................................................................................... 49 CHAPTER 3 EASY ALLIANCE?: SHANGHAI-VOLKSWAGEN IN THE TRIPLE POWER .................................... 52 3.1 CENTRAL – SHANGHAI RELATIONS IN THE 1980S .......................................................................................... 54 3.2 CONFLICTS AND COOPERATION IN LOCALIZATION .......................................................................................... 60 The central government vs. VW .......................................................................................................... 63 Shanghai municipal government vs. VW ............................................................................................ 67 3.3 DEVELOPMENT IN A PROTECTED MARKET .................................................................................................... 74 SUMMARY AND ANALYSIS ............................................................................................................................... 78 CHAPTER 4 VOLKSWAGEN AND THEIR CREATED MARKET ...................................................................... 81 4.1 THE CHANGING REPRESENTATIONS OF THE CAR IN CHINA ............................................................................... 84 4.2 SHANGHAI-VOLKSWAGEN AS A PIONEER IN CHINESE CAR MARKET ................................................................... 94 4.3 CHINESE SOCIAL STRATIFICATION AND THE EMERGENCE OF PRIVATE CAR OWNERS IN THE 1990S ........................ 100 Chinese Social Stratification until the mid-1990s .............................................................................. 100 China’s New Rich and Their Cars ....................................................................................................... 105 SUMMARY AND ANALYSIS ............................................................................................................................. 110 CHAPTER 5 VOLKSWAGEN? : CHOOSE OR NOT? ................................................................................... 112 5.1 THE CHANGE OF CHINESE AUTO POLICY AND THE RAPID DEVELOPMENT OF THE AUTO INDUSTRY ......................... 112 Central Power in Chinese Auto Policy Making .................................................................................. 113 Automobile Industrial Policy, the Ninth Five-Year Plan, and the Tenth Five-Year Plan ..................... 120 Foreign Investment and China’s Auto Development ......................................................................... 125 v 5.2 VOLKSWAGEN’S LOCALIZATION EFFORTS IN CHINA ...................................................................................... 133 5.3 SOCIAL CHOICES: VOLKSWAGEN VS. ITS COMPETITORS ................................................................................. 140 Chinese Political Hierarchical System and Official Car Choices ......................................................... 140 Social Classes and Car Consumption ................................................................................................. 150 SUMMARY AND ANALYSIS ............................................................................................................................. 160 CHAPTER 6 DRIVING FORWARD ........................................................................................................... 163 6.1 POPULAR NATIONALISM AND