The Study Of Inner Mongolia Undertakes Industrial Transfer Based On View Of Industrial Agglomeration

In recent years, we have seen the price of factors of production rising and the comparative advantages gradually declining in the east of China. The increasing conflict between the economic development and the environment protection in the eastern area of China is alarming. These finally contribute the speeded-up pace of industrial relocation from the eastern China to central and western regions. Logically, it provides the opportunity for some central and western provinces to receive the investments. However, not all industries of the east are suitable to be relocated in less developed areas. In the process of the competition for the investment, central and western provinces should adopt scientific standards for industry screening scheme regarding their own nature and industry plan. The goal of the research is to recognize and discuss the problems as follows:1) How could Inner Mongolia as a western autonomous region stand out in the competition?2) What should Inner Mongolia be the scientific standards and policy to take the industries shifting from the eastaccording to its own existing industry? This paper focuses on Inner Mongolia as a sample province in the west. First, according to industry cluster theory and company agglomeration strategy, industrial relocation interacts with the business at local. We use the location quotient and the industry cluster dynamic index to analyze the current Inner Mongolian industries and find that Inner Mongolia mining industry has obvious advantages. Most of manufacturing industries are in the phase of formatting industrial agglomeration with at a faster pace than the national average speed; Meanwhile, we apply the Inner Mongolia inbound investment data to analyze industries relocated in Inner Mongolia. The findings are below:1) inbound direct investments in Inner Mongolia mainly concentrate in the second industry.2) The third industry is on the rise to take investments.3) Inbound foreign direct investments are mainly from other Asian countries. Through the analysis at above two aspects, the research concludes that the company agglomeration strategy and the industry cluster drive industrial relocation significantly. This provides theoretical supports for Inner Mongolia to use industry cluster as media to integrate industries transferred with local economy. Secondly, we introduce comparative advantage theory to analyze the industries in Inner Mongolia and to study on the trend of industrial relocation. Combined with principles of industrial relocation, we will be in the position to pinpoint the key industries compatible with of Inner Mongolia’s industrial fabric. Finally, according to key factors to build the evaluation scheme, this paper adopts principal component analysis to conduct an empirical analysis. The outcome is that Inner Mongolia ranks at second place but after the Sichuan province regarding the ability to capture the industries on the move. However, compared with most central provinces which started receiving industries to be relocated earlier, Inner Mongolia shows inadequate infrastructure, comparative advantage only with few industries, lack of technological innovation capability and other issues. To solve above problems, this paper suggests optimizing business environment, strengthening the economic bodies, and improving the innovation ability of science and technology to further upgrade the capacity of taking industries transferred to Inner Mongolia.