Industrial restructuring and regional division of labor: A study of the electronics industry of Hong Kong and Shenzhen special economic zone (PRC)

This dissertation discusses the industrial restructuring and regional division of labor between H.K. and Shenzhen SEZ through a study of the electronics companies (H.K. and global) based in H.K. The impacts of industrial restructuring on, and the development pathways of both cities are examined. The findings are based on: (I) documentary research, and (II) fourteen case-studies of electronics companies through personal interviews with manufacturers, and factory visits in both cities.; Research findings indicate that regional production integration has brought about short-term benefits for both cities with trade-offs for long-term development. H.K. benefits from cheap labor and land supply from the SEZ, but suffers from a further delay in technological upgrading. The economic restructuring has transformed the city towards a center of managing cross-border production and providing regional service, and its working classes bear the cost of economic transformation. H.K. is increasingly integrated into the regional division of labor of Guangdong Province; the regional division is structured in a way that Shenzhen and the Pearl River Delta cities have become similar but separate entities dominated by H.K. capital, and compete against each other for foreign direct investment. Shenzhen SEZ has had high economic growth rates. But its industrial development has exhibited a lack of significant technology anchorage, skill formation and linkage effects, and remained overdependent on migrant labor. Facing intensifying competition from the Delta region, the SEZ is attempting to follow the pathway of H.K. to build a service economy. A one-dimensional orientation of both H.K. and Shenzhen towards service economy building without technological and industrial upgrading increases the vulnerability of both cities to the global economic fluctuations.; Whether the existing regional relationships can be translated into a more positive, developmental one depends on the political decisions of the present and future governments of both sides, with the impending unification of H.K. and China. Leaving the decisions to the invisible hands of the market will only enlarge the economic, social and regional inequity.