Technological capability building and strategy selection: A framework for China's auto industry

China's automobile industry booms in recent years, however, it will he at stake if dependent too much on their foreign partners. As the protection is weakened greatly on entering the WTO, new technological strategy is needed. This paper examines the development of automobile industry in China and then identifies several critical facts influencing the technological strategy. We suggest that an endogenous capability building strategy is needed and active learning is necessary in this process for future success.