Academic journal article
By PingQing, Liu; Qiang, Gu
Canadian Social Science , Vol. 3, No. 3
In the globalization era, cost competitiveness alone will not be sufficient to guarantee further success. The China's LICs faced a serious challenge between the top-down (global) and bottom-up (local) governance pressures. In order to remain competitive, there is a need for LICs to upgrade their activities and move up along GVC, and shall constantly pursue enhancement and optimization of value chain and developing their capabilities. To help overcome the constraints on LICs, the need to develop new and more effective governance strategies and policies are high priority. This paper also shows how LICs can break out of the "lock-in" which results form working for a small powerful GVC's governors. It recognizes the GVC governance variance and opening up new opportunities for LIC.
Key words: Local Industrial Clusters (LICs), Global Value Chain (GVC), Governance
Résumé: A l'époque de globalisation, la compétitivité du prix seul ne suffit pas pour garantir le succès futur. Les GIL de Chine font face à un double défi sérieux des pressions de gouvernance globale et locale. Afin de maintenir la compétitivité, il est nécessaire pour les GIL d'améliorer leurs activités et de s'avancer dans la CVG. Ils devraient poursuivre constamment le renforcement et l'optimisation de la chaîne de valeur et développer leurs capacités. Pour vaincre les contraintes, le développement de plus de nouvelles stratégies de gouvernance est devenu la première priorité. L'article montre aussi comment les GIL peuvent se débarrasser de l'isolation qui résultant du fait qu'ils travaillent pour les gouverneurs d'une petite CVG puissante. Il reconnaît la différence de gouvernance de la CVG et la création de nouvelles opportunités pour les GIL.
Mots-Clés: Groupes industriels locaux GIL), Chaîne de valeur globale(CVG), gouvernance
Since the initiation of economic reforms in 1978, China has become one of the world's fastest-growing economies. From 1979 to 2005 China's real GDP grew at an average annual rate of 9.6%. Trade continues to play a major role in China's booming economy, China is now the world's third-largest trading economy, 'MADE IN CHINA" products could be seen everywhere in the global market. Foreign visitors to China are often surprised to find hundreds (or even thousands) of factories producing the same type of merchandise in a single township or county. Why does China enjoy manufacturing advantage over other countries? Low-cost labor certainly comes into play, but it's only part of the answer. Another factor-and in many cases an even bigger one-is the existence of LICs.
The LICs-e.g. Zhejiang's so-called lump economies (Kuaizhuang jingji) , specialized towns (zhuangye zhen) and manufacture base (shengchan jidi)-focus on one product in a locality, and are conducive to industrial linkages in response to market competition. In China, LICs have a fairly long history. Jingdezhen has a pottery and porcelain production cluster with a history of more than 1,400 years; while Shenze Town of Wujiang in Jiangsu has been one of the well-known silk manufacture and trade centers in China for hundreds of years. Nevertheless, the development of industrial clusters gained momentum after the country implemented its reform policies in 1978. Recent studies (Zhou and Pu, 2003) (Zhu, et, al, 2005) identify LICs as one of the most productive strategies in promoting sector and regional growth. This remarkable specialization has helped China to increase its manufacturing capacity and overall competitiveness, and a growing percentage of cluster's production is functionally integrated into the global systems of supply to the global market.
In China, LICs mostly are located around booming cities and towns in the eastern coastal region-particularly the Yangtze River Delta (YRD), the Pearl River Delta (PRD), as well as in the Bohai-Rim (BoR) region in the north. The three regions have developed a broad range of clusters in various industries, and LICs create 50% of manufacturing output in east-south of China. …