This thesis first examines the development of the China auto industry and the evolution of policies adopted by the China government to adjust and standardize its auto industry. Analysis of the historical development and current situation of the China auto industry suggests that technology transfer (technology introduction, digestion, and innovation) should be improved and enhanced to enable the auto industry to become a pillar in the national economy. Ways of technology transfer for the Chinese automakers is examined in this thesis by studying the experience of Japan and Korea.