This paper analyses the political economy of developing the modern Chinese automobile industry. By using qualitative research method, especially case study, and developmental rent management analysis framework, the author analyzed the development in three different time periods since the Chinese economic reform in 1978. Case studies of learning period, developing period and new Chinese owned enterprises after joining WTO presented different policies and rent management strategies arranged by the state to industrialize and develop the modern Chinese automobile industry. Although there are failures involved in the arrangement, China finally industrialized and developed its modern automobile industry and became the world\u27s largest automobile manufacturing country since 2009. This thesis provided evidences that developing countries cannot easily develop their own industry successfully without the well-designed interventions from the state
