The joint venture model in China's automotive industry has not only squeezed profits but also led to the erosion of original strengths, particularly in technological R&D. During the process of Sino-foreign joint ventures, China's R&D capabilities were fragmented, and a significant loss of R&D personnel became a recurring issue. It was extremely difficult for foreign partners in these joint ventures to allow Chinese companies to build their own R&D teams. In some cases, even the joint ventures themselves encouraged the dispersal of Chinese R&D staff. In an interview with this reporter, Professor Lu Feng, director of the Peking University Government and Enterprise Research Institute and head of the task group on developing China’s independent intellectual property rights in the auto industry, directly criticized the "market-for-technology" strategy, calling it detrimental to independent R&D. His research group recently published a report highlighting the damage caused by the joint venture model to China’s automotive R&D capabilities. At the end of March, Dongfeng Motor Corporation established a passenger vehicle R&D center in Guangzhou, investing 330 million yuan. This development raised questions about China's ability to pursue independent innovation. However, the Japanese side's response dashed any hope: the center is part of Nissan’s global R&D system and will not independently develop models. Xu Jianming, the Chinese R&D director at the center, outlined three steps for the R&D plan: first, replicative domestic R&D; second, simultaneous localization of R&D; and third, joint development with Nissan. However, he admitted that independent R&D is not currently on the agenda. Despite this, Xu still hopes the center will one day achieve independent R&D. Many automotive R&D professionals share this aspiration, though some express it through collective departures. A well-known example cited by Lu Feng involved Dongfeng's attempt to dismantle its technology center in 2000, leading to over 20 engineers leaving. These engineers, trained in France, later joined Chery and helped launch successful models like the QQ, Oriental Son, and Qiyun. Similar talent losses occurred across the industry. FAW Group lost hundreds of technical staff between 1993 and 2000, while Chery and Geely also faced significant departures. SAIC, however, managed to attract talent from its Shanghai Pan-Asia Automotive Technology Center. Yet, the problem persists: a shortage of new technical personnel and a lack of interest in nurturing them. Dongfeng, for instance, once recruited heavily from top universities like Tsinghua, but this trend declined in the 1990s. Many Chinese engineers now work in the U.S., where they contribute to major automakers. Meanwhile, Chinese companies often neglect their own R&D departments, treating them as secondary. One Tsinghua graduate noted that while production facilities are advanced, R&D departments are outdated and under-resourced. Corporate leaders often favor foreign technology over domestic capabilities, leading to a lack of motivation among engineers. Chen Yaoming, a retired engineer, recalls how his former colleagues left due to poor working conditions and low recognition. He emphasized that China must invest in R&D rather than rely on foreign imports. He also pointed out that South Korea, once seen as incapable of building a car industry, now surpasses China in both technology and competitiveness. Professor Lu Feng argues that the joint venture model hinders China’s growth. Companies prefer to import technology rather than take risks on R&D. The lack of independent R&D capability leads to dependency on foreign partners, as seen in the case of SAIC-Volkswagen, where design changes had to be approved by foreign suppliers. Ultimately, Lu Feng concludes that the only way for China’s auto industry to thrive is through self-reliance and sustained investment in independent R&D.

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