China’s former industry minister, Miao Wei, highlighted the country’s strengths and challenges in the global automotive industry, particularly in AI-driven vehicles.

While China excels in manufacturing EVs, producing over 10 million units annually, Miao notes this success reflects production scale, not advanced technology.

He describes China’s position as the “first half” of a broader competition, with the “second half” dependent on leadership in smart connected vehicle technology.

Miao, who managed China’s second-largest state-owned carmaker in the 1990s, stressed the need for standards and regulations for AI-enabled vehicles.

As the global automotive sector evolves, his analysis raises concerns about China’s ability to maintain its competitive edge in the next phase of innovation.

🔗 Source: South China Morning Post

🧠 Food for thought

1️⃣ China’s auto evolution: from imitator to EV manufacturing superpower

China’s journey from automotive imitator to EV powerhouse represents one of the most successful industrial transformations in recent history.

The country’s automotive strategy began with strict joint venture requirements in the 1994 Automobile Industry Policy, limiting foreign ownership to 50% while deliberately transferring technology and manufacturing expertise to domestic firms 1.

This foundation-building phase has paid remarkable dividends. By 2025, Chinese manufacturers like BYD are dominating global EV sales with approximately 258,000 units sold in January alone, representing a 37.9% year-over-year increase 2.

The transformation has been particularly dramatic considering China had just 47 vehicles per 1,000 people in 2011 compared to 800 in the US 1, showing how quickly China has not just caught up in production capacity but leapfrogged competitors in the EV segment.

What makes this achievement more notable is that China has compressed into decades what took a century in Western automotive markets, moving from basic manufacturing to becoming the world’s largest producer with significant indigenous innovation.

2️⃣ The transition challenge: from manufacturing scale to AI technology leadership

While China has mastered EV production scale, the next competitive frontier lies in AI-powered smart vehicles, requiring fundamentally different capabilities.

The global automotive AI market, valued at $480 million in 2024, is projected to grow to $3.9 billion by 2034 3, representing a massive opportunity but also intense competition for technological leadership.