The location of agglomeration

In previous studies in developed countries, most of the top agglomerated industries may geographically concentrated in big cities such as London. In concern of the relatively high geographical concentration of manufacturing industries in coastal regions in China, we now focus on the geographic distribution of the most agglomerated industries and investigate the related industries located in close geographic areas. Tables 1.10 show the regions with the first and second largest share of employees for the most agglomerated industries in 2007. The average firm size of the industry and the share of large firms among the total number of firms is also provided.

[Table 1.10 about here]

The first observation is that natural resource extraction industries have much higher geographic concentration than other industries. Gaizhou as a region with very rich natural resources have about 60% of total employment and 40% of number of firms in Magnesium Mining and Dressing. Xiuyan Manchu Autonomous County is also renowned as the origin of precious stones in China and magnesium ore in the world. A similar example of geographic agglomeration of natural resources is the tin smelting industry.

Gejiu City in Yunnan Province is the place of origin for tin, with over 60 % share of total employment in the tin smelting industry in 2002 and 2007¹⁶.

16 See the location of top twenty most agglomerated industries result in table A.10.,A.11. and A.12 for 1998，

2002 and 2003 in the appendix.

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The textile industry especially silk industry is a traditional manufacturing industry as the part of Chinese culture orientation and have been well developed since Han dynasty (BC-202). Shaoxing County, as the traditional silk processing region, appears as the top agglomerated regions for two silk industries in 2007 – silk spinning and silk processing (SIC-1742), and silk dyeing and finishing (SIC-1743). Wujiang District in Suzhou, another region in Jiangsu province is another silk processing centre with over 15% of employment concentrated within the region for both Silk dyeing and finishing industry and Silk spinning and silk processing industry. With 33.42% share of employment, the top agglomerated region for silk products (SIC-1754) which is the downstream of silk industry is in Shengzhou, where is close to Shaoxing and other silk industry concentrated counties. It implies an upstream-downstream chain in Zhejinag and Jiangsu Province in the south coast region of China.

Small tools and electronics are the third top agglomerated industry group including Knives, scissors and similar household metal tool (SIC-3424), Calculator and money and special equipment (SIC-4155), Home electronic ventilation appliances (SIC-3953), Other household electrical appliance (SIC-3959), Household kitchen appliances (SIC-3954) and Teaching equipment (SIC-4126). The top region of share of employment and number of firms are found in Zhongshan, Shunde District and Bao’an District in Guangdong Province. The share of total employment and number of firms for these industries is the lowest among the natural resource extractions and traditional industries, about 40% and 30% share of total employment and number of firms concentrated in the first and second agglomerated regions. Calculator and money and special equipment (SIC-4155) is the only industry agglomerated due to limited number of large firms according to its high share of employment ratio and low number of firms ratio. The agglomeration type of other industries in this group is due to large number of employment and firms. We find no evidence that high-tech industries are highly agglomerated at county level in China.

Finally, there are five industries with average firm size at top agglomerated region is

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larger than the other regions 2007. Those industries usually have much smaller share of firm numbers in the second agglomerated region compare with the top region. It leads to the pattern that firms are highly geographically dispersed and with larger firm size in those other regions. The limited number of larger firms is therefore give us a higher average firm size number.

As we mentioned in previous, some highly agglomerated 4-digit industries belong to the same 2-digit industry or have a close value-chain relations may geographical concentrated close to each other. We further apply the map of share of employment distribution to examine such minimizing of transportation costs phenomenon. Figure 1.10 to 1.13 give selected examples of the top and second industrial agglomerated region of top twenty most agglomerated industries¹⁷.

[Figure 1.10 about here]

[Figure 1.11 about here]

[Figure 1.12 about here]

[Figure 1.13 about here]

Shandong province as the centre of machines and equipment manufacturing has a large supply on metal and has large share of employment on precious metal rolling (SIC-3352).

In figure 1.10, the reason that top and second agglomerated regions are both located in the coastal region is attempting to take advantage of lower transport costs of importing raw metals from overseas. On the other hand, some light industries are agglomerated with the top and second most agglomerated regions in southern China. Guangdong province as the centre of small electronics and tools manufacturing industries show a clear regional industrial agglomeration bias. Both household kitchen appliances

17 See other samples of top agglomerated regions in figure A.12 to A. 15 in the appendix.

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(SIC-3954) and home electronic ventilation appliances (SIC-3953) are found to be highly localized in the Pearl River Delta where are close to ports in Hong Kong for exports to the north America market. Industrial agglomeration in inner land are different from previous two coastal regions. The more resource based silver smelting are geographically concentrated in two countries in Hunan province close to each other in 2007. It is clear to show a regional variation on the type of top agglomerated industry across regions.