Analysis Of Chinese Industrial Agglomeration Characterized By Processing Trade Directivity

Since the reform and opening policy, we had seen great achievements in economicdevelopment of China. But with the development of economic globalization, industrialdevelopment and agglomeration have caused great regional disparity in China,economic growth and productivity paid a heavy price of equality. The southeast coastalarea is in the forefront of reform and opening up, and the Midwest inland area relativelylags behind. After the west development policy, China still faces the problem that higheconomic investment in west and regional disparity coexist. The industry especially thelabor intensive industry transfer from east to west appears gradually, but not in asignificant way. Meanwhile, the economic development and industrial agglomeration ofthe eastern region has some development obstacles such as increasing cost of land, laborand environment or the pressure from outside and within to pursue industrialtransformation. Whether there are differences before and after the west developmentpolicy? What is the possible influence of processing trade upon industrial agglomeration?This paper has great significance for our country on the regional development policy,and may promote the design of the frontier policy in industrial transfer.First, this paper expounds the background of the subject, the research purpose andmeaning, the thought and method, the structure and innovative points. Next, the paperreviews current research from different aspects. Based on this, this paper proposes thefocuses of this research, building industrial agglomeration intensity index and study thedifferences and relationships between processing trade and industrial agglomerationintensity. Then, this paper uses panel data, and means of statistical analysis, panel datameasurement test to study questions above. The main results are as follows.a. We find that after the opening and reform policy, there is a consistent industrialagglomeration toward the east region of China both in heavy industry and light industry,and an obvious trend of industry agglomeration into Guangdong, Shandong, Jiangsu andZhejiang provinces.b. This industrial agglomeration is characterized by processing trade directivity andaffected by opening and market reform. On this basis, the paper makes empirical testsbased on panel data of28provinces from1986to2009.c. The empirical results show: market reform has a continuous positive impact onindustrial agglomeration; inter-regional opening gradually plays a more significant role in promoting industrial agglomeration than international opening; governmental role ineconomy begins to exert negative impact.d. Besides, high level of regional consumption and infrastructure, low labor wagealso facilitate industrial agglomeration.According to the above analysis, this paper suggest, promote the development ofprocessing trade especially in west and middle region of China, implement theinter-connections between different provinces, to settle up a completely united market.Strengthen the service responsibility of regional government and treat market power orthe invisible hand as the basis of industrial agglomeration and transfer, completeeconomic policies of human resources investment and the fundamental infrastructures,and mobilize the whole society to participate in labor fluency and consumptionestablishment.