Published online by Cambridge University Press: 22 October 2013
This paper explains the extraordinary rise of the Beijing Hyundai Motor Company (BHMC), a joint venture between a state-owned enterprise run by the Beijing municipal government and Hyundai Motor Company. Within the span of three years, the BHMC soared to become China's second-ranked automotive manufacturer in terms of units sold. I highlight the role of the Beijing municipal government in creating favourable market conditions for the BHMC during its initial operation phase (2002–2005). The Beijing municipal government selectively adopted protectionist measures and liberalizing measures to promote its locally based company. I characterize this practice as fragmented liberalization, a system through which sub-national governments discriminately apply WTO or central government regulations to promote their local joint venture partner. In so doing, I also challenge the existing assumption that multinational companies are the drivers of economic liberalization, by showing Hyundai's support for local protectionism and industrial policy at the sub-national level.
I would like to thank Vinod K. Aggarwal, John Ravenhill, Bai Rangrang, Jennifer Choo, Chris Sullivan, Rongbin Han and John Yasuda for commenting on various drafts of the paper.