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The Industry Spread Evaluation on China’s "Coastal-Area and Board Area Model"

Author: SongDanJie
Tutor: LiangShuangLu
School: Yunnan University
Course: National Economics
Keywords: The Spread of Industry Coastal Core area Board Periphery area Economic Development
CLC: F127
Type: Master's thesis
Year: 2011
Downloads: 34
Quote: 0
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Abstract


The China’s east coastal region is the earliest opening window after reform and opening, which realized its higher economic development level comparing to the west part of China. With the rapid development in east coast, some areas in this region have already entered the late stages of industrialization or even become post-industrial society, featured in technology-intensive industries become the leading force of economical development. As a result, present labor-intensive and capital-intensive industries that benefited the development of early and middle stage of industrialization will no longer be as powerful for the future economy development and will need to relocate. On the contrary, the development level of west China remained low and the economic gap between east and west becomes more and more pronounced over time. Taken advantage of West China Development Drive program initiated at the beginning of the 21st century, many regions in west Chine become carriers of labor or capital-intensive industries thus gains rapid and sustained growth in economy.This paper will use the "Core-Periphery Model" and the theory of the spread of industry of spatial economics to analyze the real scenario of current Chinese economy. In this paper, the author constructed a "Chinese Coastal-area and Board-area model", the Coastal-area representing the well developed core area, while Board-area being underdeveloped periphery area. Thus different industries will migrate from the core to the periphery region according to certain rules. Therefore, this paper has selected these two pairs of regions, "Circum Bohai-Sea region and Inner Mongolia" and "The Pearl River Delta and Yunnan-Guangxi", as the cases of study. By analyzing the region’s present economy development status, the industries’location quotient, labor intensity and input-output structure, this paper outlined the basic characteristics of the spread of industry in "Chinese Coastal-area and Board-area" model and provided possible explanations for the differences of economy growth patterns between periphery areas. Particularly, this paper indicated that the spread of industry is emerging from Coastal-area to Board-area in the past few years nevertheless the pattern of industrial spreading varies among areas. Although the overall characteristics of the industrial spreading approximate with KFV’s conclusion, that is industries with the higher labor intensive, weaker linkage, or located upstream of the industrial chain will relocate first, there are other unique features of industrial spread in the China’s mode. After taking industry location quotient into consideration, it was found that the industries with comparative advantage in periphery area grow faster than the others among industries relocated away from the core area. Moreover, this paper also pointed out that when the industrial structures between core and periphery are more similar, the greater industrial spread will be.Last but not the least, this paper gives the linkage between the spread of industry and economic development. With the greater spread degree, the higher location quotient, and the similar industry structure, the Board periphery area can gain more rapid ’take-off’ of its economy from the spread of industry.

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