The Impact Of Logistics On The Manufacturing Industry

In the early period of manufacturing’s development, logistics was part of the manufacturing industry. With the upgrading and differentiation of manufacturing, logistics became more independent and began to play an increasingly positive role in promoting efficiency in manufacturing. However, even though logistics has matured, manufacturing is still important to logistics, and provides demand and the necessary technical and infrastructural support for logistics. Consequently, together they have now entered a new phase of interaction and integration.The last20years has witnessed dramatic growth in China’s GDP, but this growth has been unbalanced development between sectors. In terms of the relationship between logistics and manufacturing, many scholars have done research based on individual provinces or theoretical analysis. However, research focused on empirical tests and regional disparities are relatively few. This thesis chooses three typical manufacturing regions and uses panel data from1995-2010in8provinces to study their correlated development and regional differences of the two industries. Northeastern China is the base of heavy equipment and raw material manufacturing. It was the first part of China to develop heavy industry due to its abundant coal reserves. The Yangtze River Delta features both developed heavy equipment manufacturing and a high degree of processing and techno logy-intensive high-end manufacturing. The Pearl Delta mainly focuses on trade processing and high-tech manufacturing.The economies of these three regions have reached the point where they need to form a new development pattern in order to maintain and promote competitiveness. Currently, the development of logistics and manufacturing are not at the same level. Therefore, to study the mechanism between manufacturing and services is of great importance to the future development of the three regions. Is there any mechanism that correlates development between the two industries? If so, does the development of logistics have a positive effect on manufacturing and in resolving any regional disparities? This thesis will try to reflect the interrelationship between the two industries and make policy recommendations to promote development in the three regions and the national economy as a whole.