The joint venture model in China's automotive industry has not only squeezed profits but also led to the erosion of its original strengths, particularly in technological R&D. During the process of Sino-foreign joint ventures, China’s R&D capabilities were gradually weakened, with a series of incidents involving the mass departure of key R&D personnel. It was extremely difficult for foreign partners in these joint ventures to allow China to build an independent R&D team, and in some cases, they even encouraged the dispersal of Chinese R&D staff. Professor Lu Feng, director of the Peking University Government and Enterprise Research Institute and head of the task group for the "Auto Industry to Develop China’s Independent Intellectual Property Rights," directly criticized the "market-for-technology" strategy, calling it harmful to independent research and development. In a recent report titled “Current Situation and Countermeasures for the Independent Development of the Chinese Automobile Industry,” his team highlighted the damage caused by the joint venture model to China’s auto R&D capabilities. At the end of March, Dongfeng Motor Co. Ltd. established a passenger vehicle R&D center in Guangzhou, investing 330 million yuan. While this raised hopes for independent R&D, the Japanese side made it clear that the center is part of Nissan’s global system and will not independently develop new models. Xu Jianming, the Chinese R&D director at the center, outlined three steps for the R&D plan: first, replicating domestic development based on Nissan models; second, simultaneous localization of R&D; and third, joint development with Nissan. However, he admitted that independent R&D is not currently included in the plan. Despite this, Xu still hopes the center will one day achieve independent innovation. Many R&D professionals share this aspiration, and some have taken drastic actions to express their frustration. One notable example is the 2000 case where more than 20 engineers from Dongfeng’s technology center left after the company attempted to dismantle it. These engineers, trained in France, later founded Jiajing Technology Co., Ltd., helping Chery launch several successful models. Similar talent losses occurred across the industry. From 1993 to 2000, FAW Group lost hundreds of technical experts, and companies like Chery and Geely also faced significant departures. SAIC Group, however, has managed to retain talent, with many core members working in its Shanghai Pan-Asia Automotive Technology Center. A growing concern is the lack of new technical talent entering the industry. Dongfeng once recruited heavily from top universities like Tsinghua, but since the mid-1990s, it has struggled to attract graduates. Meanwhile, over 7,000 Chinese engineers work in U.S. automakers, representing a significant loss of talent. The indifference shown by joint venture companies toward R&D staff is alarming. At one time, a Tsinghua graduate noted that while production facilities were advanced, the R&D department was outdated and under-resourced. Many design departments are considered secondary, with corporate leaders prioritizing foreign technology over local expertise. Chen Yaoming, a retired engineer, recalls how the technical center was dismantled into smaller teams, leading to a lack of growth and motivation. He believes that while China lags behind developed countries in R&D, it must invest in building its own capabilities rather than relying on foreign imports. Lu Feng emphasizes that joint ventures often avoid R&D due to high risks and lack of incentives. Companies prefer to rely on foreign technology rather than take the risk of developing their own. This has led to a dependency on foreign partners, limiting China’s ability to innovate. In conclusion, the joint venture model has hindered the growth of China’s auto industry. To truly develop, China must prioritize self-reliance and invest in its own R&D capabilities. As Lu Feng states, the path to success lies in independent development, not imitation.

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