This research analysed four main themes – role of government, globalisation, foreign direct investment (FDI), and industrial clusters in the context of Chinese automobile industry. The aim was to explore how these four elements were brought together to achieve industrial development and modernisation in the Chinese automobile industry since 1949. In particular, the globalisation process, speedily driven by the world economy, has been shaping the automobile industry in a profound way. With this mega trend, China was able to initiate a set of policies undertaken by the government to develop its own automobile industry in several regional clusters across the country, which in turn hastened the progress of modernisation. Moreover, FDI has been critical for remaking a once backward automobile industry into one that has large-scale assembly capacity, comprehensive local supply networks, and a new generation of indigenous car brands and models. The overall methods adopted for this research are semi-structured face to face interviews and case studies. In order to accomplish the research aim, 11 interviews have been carried out with key personnel drawn from the Chinese automobile industry. Participants have been chosen because of their expertise on this topic. In addition, three case studies were developed on the performance of three different types of firms operating in China: private (Geely), state-owned (Chery), and joint venture (Beijing Hyundai). Three cases were analysed in-depth in order to gain a rich understanding of the context of operation in the Chinese automobile industry. The key conclusions are both the role of government and FDI by multinational firms have been crucial to the development of the automobile industry in China and will be so for many years to come.

Through analysis of the impact of international automobile manufacturers to enter the China market factors, summarized in its mode of entering the Chinese market to explore the automotive industry in Taiwan to enter the Chinese market is likely to choose. The study found that lower costs and increase the diversity of products to major automobile manufacturers are two main factors, which entered the Chinese market, the time difference will lead to the same entry mode, but joint ventures and wholly-owned is still the main mode.