It is widely believed that the enter of multinational automakers and the ownership
reforms of native enterprises promoted the development of China’s automotive industry in
recent years, but no study has been conducted on it’s productivity. In this study, using
micro-data on China’s automakers from 1999 to 2004, we tried to elucidate the characteristics
of the development of China’s auto industry. According to the analysis results based on
Cob-Douglas type production function, we found, 1) the rapid development of auto industries
in China accompanies a rapid improvement in productivity from 1999-2004; 2) in China’s
auto industry, foreign-affiliated firms or foreign capital have overwhelming strength with
regard to productivity; 3) the improvement in productivity of auto industry is not attributable
to foreign-affiliated firms or foreign capital only, the contribution of state capital to
productivity has risen gradually, and has approached that of non-state capital.