Research On Industrial Agglomeration Effect Based On FDI Of Shenyang

Shenyang, once known as department of industrial equipment in China, was a heavy industry base developed in the first and second Five-Year Plan. However, during the process of changing from planned economy to market economy, the industry of Shenyang had been in a morass since late 1980s. That the industry can be grown up is a pivotal question for Shenyang, the old industry base, to bloom again. So, it is an urgent problem to be studied and solved.Industrial agglomeration is an inevitable outcome in the course of many countries' economic development as a kind of geographical phenomenon in the industrial evolutionary process. Because of increasing scale proceeds and the positive effect of external economy, industrial clusters often lead manufacturing industries to further centralization tendence and have an important influence to regional industry layout and development. It has been confirmed by our country's government that industrial clusters can develop regional economy, so that the central and local governments make principles and policies to improve industrial clusters. Meanwhile, Shenyang is accelerating the pace of constructing manufacturing clusters, so there is an urgent need of relevant theory to direct manufacturing industries' agglomeration. This paper analyzes the Shenyang manufacturing industries' agglomeration by using theories of industrial agglomeration and FDI comprehensively. The aim of this paper is to exam if there is an agglomeration trend of Shenyang manufacturing industries and to verify whether FDI can improve industrial agglomeration on the background of putting forward and carrying out the strategy of revitalizing old industrial bases in the northeast region by central government. The results show that the degrees of industrial agglomeration of several Shenyang manufacturing industries are higher than the average level of the whole country including transportation manufacturing industry, rubber manufacturing industry, medical and pharmaceutical manufacturing industry, special equipment manufacturing industry and ordinary equipment manufacturing industry. And FDI can accelerate agglomeration of transportation manufacturing industry which has been selected as typical industry.According to the analysis above, this paper divides Shenyang manufacturing industries into several ranks, including industries of absolute advantage, industries of comparative advantage, growing industries and industries of disadvantage. The policies of absorbing FDI and developing manufacturing industries should be carried out according to the importance of the ranks. The government should keep on absorbing FDI into industries of absolute advantage, and make full use of the investment to accelerate these industrial clusters. Meanwhile, the ability of industrial fittings should be improved. Shenyang should construct system of cooperation and fittings to develop the main industries which can absorb more FDI by encouraging and guiding development of industrial fittings, and establishing modern logistic service market. These policies could increase investment and develop industrial agglomeration efficiently by FDI.