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The Evolution of China’s Industrial Agglomeration

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Industrial agglomeration is caused by the disposable moving and free configuring of productive factors. It’s an inevitable phenomenon that industries highly concentrated inside a particular area underneath the conditions of market economy. Because agglomeration can promote economic development and enhance regional competitiveness, discovering the evolution laws and regulations of agglomeration is useful to build up appropriate regional strategies and industrial policies.Industrial agglomeration continues to be led by government at that time of planned economy, industrial structure was inefficient. Along the way from planned economy transferring to promote economy, the fluidity of product factors continues to be enforced, many industries’ location are led through the economic rule rather of presidency planned policy, industrial layout has altered dramatically.

New Economic Geography theory shows that the commercial agglomeration and regional integration undertake a reversed “U” curve underneath the interaction between proportions of economy and transportation costs, that’s, inter-regional transport costs still decline with the introduction of market economy, and also the geographic layout of industries is going to be spread after gathering.

In line with the theory this paper analyses the place selection and geographical evolution of various industries.By calculating the EG index and CR3 of 18 industries in China through fifteen years, this paper acquired a comparatively complete and detailed evolution trend from the industrial agglomeration. The outcomes demonstrated that lots of manufacturing industries’EG indexes elevated that was in line with their CR3s, for example chemical fiber manufacturing industry, electronics and telecommunications equipment manufacturing industry, instrumentation and Cultural office machinery manufacturing, textiles, electrical equipment and machinery manufacturing industry, food processing and manufacturing, paper and paper products industry, chemical fuel and chemicals industry, which essentially fit in with technology-intensive and labor-intensive industries. But there also same industries whose EG indexes remain unchanged, for example beverage manufacturing, oil processing and coking industry, pharmaceutical manufacturing, fabricated metal products, ferrous metal smelting and moving processing industry, non-ferrous metal smelting and moving processing industry, these industries are essentially resource-intensive industries.

Surprisingly, the equipment and machinery manufacturing and transportation equipment manufacturing industry that have apparent economies of scale were hardly elevated in EG indexes and CR3s, this might have something with places limited rationality throughout the market-oriented reform process within our country.Regarding towards the places that industries agglomerated, the eastern areas grew to become the greatest area while other locations declined in concentration. Northeast of China possessed a greatest drop, the dominance of numerous industries in this region happen to be substituted with eastern areas. And central regions also were built with a slight loss of industrial concentration. With reference to northwest and southwest of China, regardless of past or present, their industrial agglomeration level was the cheapest, and over the years, this level becomes further low. Tibet, Qinghai, Ningxia, Xingjiang etc. almost don’t have any manufacturing industries.

Based on the calculating of agglomeration rates of 18 industries, the paper examined why different industries performed different evolution trends. The primary conclusions including: First of all, endowment advantages impact industrial location by natural advantages and purchased benefits of a particular area. Next, in most cases, the combination of domestic marketplace is growing, which reduced inter-regional transportation costs and promoted the commercial agglomeration. Thirdly, the amount of worldwide market integration is greater than domestic market integration level. Many industries concentrated to Eastern China due to the strengthening of exterior demands, foreign direct investments and good market accesses.

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