China'S Footwear Industry Is Moving Westward.

In order to drive the economic development of the central and western regions through the gradient pfer of the industry, the central government and local governments should focus on strengthening domestic demand and improving the region, especially the mainland.

Some famous manufacturing enterprises represented by Foxconn moved the processing factories from the coast to the mainland, which once again aroused concern about the phenomenon of p regional pfer of manufacturing enterprises.

Media reports say, "in order to lower costs, more and more coastal systems are being made.

The authors and colleagues recently made use of the database of Chinese industrial enterprises to conduct a study on the spatial pfer of China's footwear industry in recent years.

We found that China's shoemaking enterprises had undergone obvious spatial pfer, but the eastward movement and the Western migration occurred simultaneously, but the shift to the East was more obvious.

Therefore, it can be said that the era of large-scale migration of Chinese footwear industry is yet to come.

Trans regional pfer is not the mainstream.

Since China's existing industrial enterprise database does not provide information about the withdrawal, disappearance and migration of enterprises, we adopt the relative pfer index, that is, to examine the spatial distribution of employment in specific industries over time.

Our data show that during the period of 1998~2009, the scale of westward relocation of enterprises did not happen.

In the 10 manufacturing industries with the highest degree of spatial pfer, the first 3 are labor-intensive industries.

From the perspective of space division between East and West, the pfer of employment space is still mostly carried out in this region, and the relative pfer across regions is not dominant.

Specifically, for the geographical direction of the relative pfer of industrial space, most of China's manufacturing industry is still concentrated in coastal areas: in the 148 industries, 63 industries are pferred among regions, quite a few from Beijing, Shanghai and other metropolis to the surrounding coastal provinces; the employment of 55 industries shows that from the inland provinces to the coastal areas continue to be concentrated, reflecting the "self agglomeration" effect of the manufacturing industry in coastal areas.

Only 15 manufacturing industries have shifted from coastal to inland. More than half of them are labor-intensive industries, including slaughtering and meat processing, silk textile and finishing, bamboo, rattan, brown and grass products manufacturing.

In addition, we also find that the mainland provinces continue to attract the attraction of resource intensive industries, and the relative pfer of these industries mainly occurs between the mainland provinces.

Why pfer?

Why do these shifts take place? Economic theories give different theoretical explanations for the layout of industrial space.

One theory holds that enterprises are willing to locate in areas where production factors are relatively abundant.

In the 1929~1954 year, the manufacturing industry in the United States experienced a shift from north to South and from east to west, which was largely related to the supply of production factors.

For example, the rapid development of the aircraft manufacturing industry in the southwestern United States is mainly related to the excellent climatic conditions in the region. The migration of chemical, wood and paper industries is due to the relatively abundant natural resources in the western region.

Many rubber and plastic shoe manufacturers are concentrated in North Carolina, Florida, Maine and other states, where there are plenty of low skilled labor force.

According to the new economic geography theory, the market entry ability of a region, that is, the market size of the local and surrounding areas, is an important factor determining the spatial distribution of the industry.

Since the reform and opening up, the eastern coast has become the most demanding market in China and is close to the world market.

Many manufacturing enterprises moving to the mainland during the "three line" period began to move back to Guangdong, Jiangsu and other regions and form agglomeration.

This is a good example of market entry.

After the establishment of the North American Free Trade Area (NAFTA), some manufacturing industries in Mexico began to migrate from the capital Mexico City to the border cities bordering the United States, and the local economic growth also led to the importance of market entry.

We use the empirical method to test the spatial pfer mechanism of China's manufacturing industry.

By comparison, we find that the new economic geography theory is more consistent with China's data, that is, market entry is the main factor leading to the spatial pfer of China's manufacturing industry between 1998~2009.

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Policy focus of manufacturing industry moving westward

Over the past 10 years, China's manufacturing industry has undergone space pfer, and some industries have begun to shift from coastal areas to the mainland. But in the short term, the focus of manufacturing industry is still in coastal areas.

We believe that in the near future, with the geographical advantages close to the world market and the huge demand created by its own economic development, the coastal areas will still be an important gathering place for the manufacturing industry.

In order to drive the economic development of the central and western regions through the gradient pfer of the industry, the central government and local governments should focus on strengthening domestic demand and enhancing the entry ability of the region, especially the mainland market.

Specifically, on the one hand, the central and western provinces still have to attach importance to infrastructure investment and regional traffic network construction, and attract more labor-intensive and low pportation manufacturing enterprises by increasing the entry capacity of the inland provinces.

However, light dependent investment in pport technology facilities is not enough.

Some scholars have made use of the data in 2007 to study the importance of the national expressway network to the regional economic development.

They believe that, despite the short term effect, the national high speed pportation network has not been able to reduce the gap between urban and rural development, but in the long run, with the increase of floating population across the region, it will play an increasingly important role in the economic development of the central and western regions.

This assertion has been confirmed by other studies.

The relevant research finds that the role of China's pport infrastructure in county economic growth during 1986~2006 is not obvious.

Obviously, the lack of factor mobility is an important reason that restricts the construction of highway infrastructure, effectively increases regional income and enterprise profits, and attracts enterprises to enter and reduce regional disparity.

On the other hand, in addition to strengthening factor mobility, governments at all levels need to invest in human capital to create local demand and promote economic growth.

In the past 30 years of economic development, we mainly rely on physical capital investment to drive economic growth, while ignoring investment in human capital.

A study on the pfer of labor force in China has found that highly educated labor force tends to migrate to areas with high human capital, while low education level labor migration skills are relatively low.

This shows that some institutional barriers, such as the household registration system, constrain the low level of education and the opportunities for migrant workers to acquire learning and skills in immigrant places.

Take the PRD as an example, in the development of manufacturing industry, some cities in this area rely heavily on the low wage and large amount of foreign labor force, which lose the power of innovation and industrial upgrading. At the same time, these regions refuse to absorb these immigrants to enjoy educational and social welfare opportunities in cities, and can not form local human resources reserves.

Therefore, after the financial crisis, these areas encountered many bottlenecks in industrial upgrading, technological innovation and attracting talents.

For developing countries, the ability to absorb rural migrants and constantly improve their skills to create greater demand can achieve the pition from a traditional agricultural society to a fully industrialized economy.

A new report by the economist think tank also suggests that China should pay more attention to human capital investment.

The article holds that they have found two new changes in the distribution of foreign direct investment (FDI) in China: first, investment gradually moves from coastal to low cost inland provinces, such as Chongqing and Chengdu; two, economic growth has created a huge domestic market, and FDI has gradually entered China's service sector, such as retail industry.

These changes not only indicate the importance of creating local demand to China's economic growth, but also remind us of the importance of investment in human capital to adapt to the development of service industries.