New energy vehicles are the way forward for Chinese auto sector

The public and private sectors have agreed that energy-saving and new-energy vehicles will form the new area of development for China's auto industry.

The Ministry of Science and Technology has already spent 2 billion yuan ($316.8 million, 248.2 million euros) helping more than 200 colleges, research institutes and companies to develop technologies in fuel cell vehicles, hybrid cars and pure electric cars over the past decade.

But the investment is far from enough when compared with those in other countries. A single foreign company could invest hundreds of millions of dollars in research and development.

There is also an ever-widening gap between China and foreign countries in terms of core technology.

In China, more than 60 companies have produced or have plans to develop new-energy cars, with about 120 models being recognized as new-energy cars.

But annual production of a majority of the cars is no more than 1,000.

The low production capacity has resulted in high prices, as well as low quality and reliability.

The same problem also exists in the car battery and electric motor industries. China has more than 100 companies producing batteries. But their combined output value amounts to only about 10 billion yuan.

China's industries also lag behind those of foreign countries - a major reason for its relatively backward car industry.

To address these gaps, the government should beef up research in basic materials and manufacturing equipment.

The future development of new-energy cars should also focus on pure electric cars, because China has basically established its own vehicle standards system and the industrial chain, starting almost at the same time with those of other countries.

The government could increase investment in several pure electric vehicle and core technology projects to meet the technological needs of the electric vehicle industry.

China began developing pure electric buses in the early 1990s with new technology.

Those electric buses have been successfully used in the Olympic Games in Beijing, the World Expo in Shanghai and the Asian Games in Guangzhou.

The technology used in the buses, with China's own intellectual property rights, has already been introduced to Europe.

China should take full advantage of its institutional and social systems to make breakthroughs in core technology and establish high-level industry standards to increase its competitiveness on the global market.

The author is a professor at Beijing Institute of Technology.