Why has China developed a huge automotive market without building up autonomous technological capability? While comparing China with South Korea’s experience, we argue that this phenomenon has to be understood in the context of a misleading and ineffective policy regime and a fragmented political structure, which in turn are associated with a disincentive market environment (sizable but unsophisticated demand) and China’s ongoing systemic restructuring that has so far been oriented toward management fragmentation. Keywords: China versus Korea; automotive industry; technological capabilit
