Research On Trends Of Chinese Manufacturing Industry Agglomeration And The Underlying Factors

Chinese central and local government has introduced many measures, including the financial, tax, business, introduction of talents, etc. to attract eastern industries to transfer to the west since China put forward the "Western Development" strategy in the last century. However, the facts indicate the effect of the policy is not obvious. This article study Chinese industrial transfer problems from the perspective of industrial agglomeration.Firstly, This article reviews classical theories of industrial clustering, including Marshall's theory of externalities, Thunen's agricultural location theory, Weber's industrial location theory and Porter's theory of business clusters. According to the theory of New Economic Geography, due to the interaction of the "centripetal force" and "centrifugal force", the gathering of the industry of a country or region will show a trend of increasing at first and then decreasing in a long enough time. Secondly, the article verify the trend of China's manufacturing industry agglomeration by calculating the Hoover Coefficient, Ellison‐Glaeser Coefficient and other agglomeration indicators with the use of China's manufacturing sub‐industry statistics 2001‐2009. Considering other scholars'research, we find that since 1985, the degree of industrial agglomeration is steadily rising; until 2007, the degree began to decline, and so did the following two years. Qualitatively this article attributes this change to the accumulation of government's policy in the last century, including the "Great Western Development" and "Industry Transfer from East to the Midwest", which introduced a series of policies.Thirdly, the article makes a quantitative analysis of the various factors that affect industrial agglomeration. In the framework of the new economic geography factors affecting industrial agglomeration is divided into three aspects of market demand, externality and industrial localization. We selected eight indicators, including proportion of the number of firms in each region, per capita years of education / national average, the proportion of non‐agricultural population / the national average, cargo traffic / the national average per capita GDP / national average, the export to GDP ratio / national average, coastal or not, and municipalities or not. Then we use the regression model to verify. Studies have shown that the externality impact on the industrial agglomeration is very significant and convenient traffic conditions in and numerous upstream and downstream enterprises around are very attractive for the enterprise. Externality tends to lead to the cluster and strengthen it. While years of education per capita, and whether municipalities have a negative correlation with agglomeration. In addition, high human cost and rent cost are "centrifugal force" to the industry agglomeration.Finally, we give proposals from the view of industrial agglomeration to promote Chinese industry transfer. On the one hand, vigorously improve the level of infrastructure of the Middle and west China. On the other hand, put forward policies to reduce local protectionism of the central and western China, and improve the level of opening up. These can promote the industry to transfer to the Middle and west China, and thus enhance the degree of industry agglomeration.