An overview of Heavy industry in Guangzhou Executive summary Guangzhou is selected as the case city in this report because of its unique geographical and economical position in the world. Among a number of industries in this city, heavy industry plays the most significant role in its economic growth. To provide a better understanding of heavy industry in Guangzhou, this report applies PEST model and also presents both the current challenges and advantages that the heavy industry face. As a typical emerging city, Guangzhou can provide some applications about how to overcome barriers in the process of upgrading industry. Introduction Guangzhou is not only one of the most prominent urban cities in China but also famous world’s factory. Supported by unique geographical location and culture, and encouraged by preferential policies, friendly economic environment and relative advanced technology, this city will make itself as important global center. With 12.78 million populations and 105,909 RMB CDP per Capita, Guangzhou ranks the third largest and the biggest south city in China. There is no doubt that heavy industry plays vital important role in boosting its economy growth, contributing to employment and spurring development of linked industries. While the heavy industry has developed dramatically over the past years, a set of new opportunities and challenges are emerging. Due to worse environment, intensive competition from domestic and global market and unbalanced industrial development, Guangzhou has to make profound changes in this industry. The region has created more room for green and efficient heavy industries by wiping out or transferring existing low value or outdated industries. Through analyzing an overview of heavy ind... ... middle of paper ... ...gzhou will not be overtaken due to the focus of government. Moreover, with the support of upstream or downstream industries, it can finish its upgrading more smoothly and quickly. It is true that Guangzhou faces some domestic and international competitors that rely on heavy industry. In my point of view, Guangzhou has more unique advantages: 1) the geographical location helps it build close relationship with South Asian Market and the Pearl River Delta speed up its value chain 2) the long trade history and inclusive culture makes it more experienced and be good at absorbing advanced technology and concepts; 3) the strong and enthusiastic government offer preferential policy and available funds to ensure the transformation of heavy industry. Guangzhou has potential to be global heavy industry hub if both market and government work together to support it continuously.
manufacturing a competitive advantage. According to 2013 analysis done by consultant AlixPartners estimated that cost of manufacturing in China will equal cost of manufacturing in U.S. due to labor cost in China has been increasing in past 10 years. The low cost energy and labor equivalence recently is contributed to 500,000 jobs created in manufacturing sector since 2010 (Ludwig & Spiegel, 2014).
The population of China has change rapidly as well as the main sectors of jobs. China has changed their Life style from agriculture being the largest section at 42% of China working in farming and other agricultural related work, while services was at 32.2% and Industrial work being the smallest at 25,2%. But in 2011 35.7% of the population is was working in services, 29.5% in industry and the agriculture section of China to 34.8% making the sections quite even .When the population grew the Chinese had a large change and started to even out the three sections.
In the near past, China exported 94 million metric tons of steel, more than the total output of the U.S., India and South Korea, the world’s third, fourth and fifth largest producers. Moreover, UBS analysts have estimated the world has excess steel-production capacity of 553 million metric tons a year, which is much of it in China. [3]
Industrial Over Capacity-To address industrial over capacity, China’s Prime Minister Li Keqiang said that they would “strengthen environmental protection, energy consumption, and technology standards; abolish preferential policies; absorb some excess production capacity, and strictly control increases in production capacity.” (Roberts, 2014). China will also decreases obsolete excess capacity of steel, cement and plate glass. These actions should improve productivity.
American economist, Rostow through his ‘Stages of Economic Development’ demonstrates that economies may ignore environmental quality in their quest for growth. This notion is true in China, with government and private firms using unsustainable practices in order to maximise globalisation opportunities. China suffers mostly from chronic air and water pollution caused by both the demand for energy (i.e. coal mines) as well as the process of manufacturing. This effect on the Chinese economy is quantified through China’s emissions, which in 2010, was 8,286 million metric tonnes, 35% higher than the next uppermost emitter, the United States. China is also home to 16 out of 20 most polluted cities in the world. Consequences for not cleaning up the environment will not just be a health crisis but an economic one. The Chinese government is now recognising and addressing the environmental problems which have occurred due to both rapid economic growth and industrialisation. It has set targets which aim at reducing pollution levels with $6.6b committed in spending in order to achieve such targets. Such examples include investment in nuclear power instead of coal, hydroelectricity (i.e. Three Gorges Dam) as well as new stringent environmental laws. It is hoped that new regulations and investment will lead the way for renewable energy and a sustainable
...they are liable to become dangerous once again. China’s goal is to once again be the ‘middle kingdom’, and they will not hesitate to take extreme measures to regain this glory. They are willing to take a ‘hit’ in the short-run to achieve their long-run goals. The influx of new technology, information, capital, management, and industry will boost China into the 21st century and beyond. This will give them the capabilities to upgrade their internal infrastructure and their military. Their only possible restraints may be a possible dependency on foreign trade and a new influx of intellectual information. This could lead to a change in the social climate in China. Even though Top leaders still effect decision making, there will be a growing need to recognize the needs of the people. China will be constrained by their new economy, but will remain a future threat.
According to a 2013 estimate of purchasing power parity, China has a GDP of $13.3 trillion. It has a 7.6% GDP real growth rate and ranks 120th in the world in GDP per capita. One of the prime advantages of China is a populous labor force that ranks first in the world, totaling 797 million evenly split between agriculture and services with a few less working in the industrial sector. The unemployment rate is a manageable 6.4% and a 7.7% industrial production growth rate. China exports electrical and other machinery, data processing equipment, apparel, radio telephone handsets, textiles, and integrated circuits primarily to Hong Kong and the United States, as well as to Japan and South Korea. China also imports electrical and other machinery as well as oil and mineral fuels, metal ores, nuclear machinery components, optical and medical equipment, motor vehicles and soybeans. Its primary import partners are South Korea, Japan, Taiwan, United States, Australia, and Germany. China utilizes transportation through its 507 airports, and a railway system that ranks 3rd in the world totaling 86,000 km. China also makes use of its roadways totaling in excess of 4,000,000 km and stakes claim to the largest amount of navigable waterways in the world. Major seaports include: Dalian, Ningbo,...
The year is 2001. China joins the World Trade Organization (WTO) and Americans give way to the new “Asian powerhouse.” China has grown 9 percent a year for more than 25 years and is recorded as the fastest growth rate for an economy in history according to and abstract by Peter Katel in the CQ Researcher. With exports rising from 38.8 billion to 196.7 billion (a 400% increase) from 1994 to 2004 to the US alone, no wonder why China has gained new popularity with the business world. In the same article Peter Katel goes on to state that two-thirds of the world’s copiers, microwave ovens, DVD players and shoes are manufactured in China. With this powerful advantage that China has, its promising future does not seem that far away. The graph to the left shows the US merchandise trade with China. As you can see, the US exports to China have fallen and its imports from China have increased greatly from 1994 to 2004.
Globalization has brought Chinese companies with four significant opportunities to do business. The first opportunity is the reduction of manufacturing costs, which are mainly caused by scale economy (Bird & Rajan 2001). According to Hitt, Ireland & Hoskisson (2007), the concept of scale economy is that a firm’s unit cost decreases as the output increases. Because globalization leads Chinese companies to expand worldwide, they produce more output and manufacture under the economies of scale. Therefore, the companies’ manufacturing costs could be declined. The next positive aspect of globalization is the improvement of product quality because of the widespread transfers of foreign technologies. One typical example provided by Farug (2010) is that Chinese Sport Utility Vehicle (SUV) producers are now taking full advantages of technology transfers so as to enhance their automobiles’ quality. The third helpful effect is that globalization provides companies an access to external financing through the international financial market. As a result, they can achieve efficient capital manageme...
Since the start of opening their ports to the outside world, China started to mass produce items fast and cheap. China’s natural resources are diminishing quickly with the demand of their products globally. Most factories that produce goods run on coal or some sort of natural resource. Increasing the demand of goods, means that the demand of coal and other scares minerals increase. In Yeh’s paper she sees that since globalization in China, “[Shanghai] has turned shopping into an entertainment.” Places such as Shanghai had rapidly adapted to globalization by accommodating some western ideas to a sacred city. The rapid growth of globalization in China has caused a massive change throughout the country entirely.
China expects its urbanization rate to rise from 47.5% in 2010 to 51.5% by the end of 2015, according to the 12th Five-Year Plan (Xinhua News Agency, 2011). Clearly, the Chinese economy is booming and China is quickly urbanizing. Investment analyst Meyers (2011) stated that a home improvement company such as Home Depot is very sensitive to positive economic growth, especially the growth in housing and urbanization areas. A booming housing market such as the one in China should boost the business of Home Depot.
China’s economy is one very large indicator of its role in globalization. “In 2010 China became the world’s largest exporter” (CIA World Factbook). Without China many places such as the United States of America would be without billions of goods imported from China annually. An influx of companies moving their manufacturing to China has allowed people to flock to cities and find jobs. China’s economy has grown exponentially over the last few decades. In the last three years China’s economy has grown by nearly ten percent every year. Despite this influx of money to China it has also resulted in many drawbacks. For example, China’s environment has been obliterated. China burns more coal than every country in the world combined. Beijing has been so badly polluted that there are actually companies that sell cans of fresh air to people, and gas masks are a common sight. On January 12th 2013 Beijing’s air pollution reached a record setting 775 PPM. To put that into perspective, the scale for measuring pollution is 0-500 PPM. This set an all-time recorded high. In Los Angeles a high ...
China in the last decade has been going under one of the fastest industrial developments in history, with their claims of wanting to build several New York size cities throughout the country, China plans to connect the whole country though the rail system to unify and bring industry to the country as a whole. China biggest growth is in the transportation and textile industry, and in order for the growth to be sustained China relies heavily on the oil important. Even though China relies heavily on outside imports, ch...
The rise in China from a poor, stagnant country to a major economic power within a time span of twenty-eight years is often described by analysts as one of the greatest success stories in these present times. With China receiving an increase in the amount of trade business from many countries around the world, they may soon be a major competitor to surpass the U.S. China became the second largest economy, last year, overtaking Japan which had held that position since 1968 (Gallup). China could become the world’s largest economy in decades.
The Chinese steel industry is considered to be a pillar industry in China’s economy as it is vital to its economic development. Therefore, under the 10th Five Year Plan for National Economic and Social development (2001-2005), the Chinese government initiated massive amounts of subsidies to Chinese steel firms believing that it will be beneficial to the industry’s growth. Since then, the Chinese government has promulgated other plans that extended and increased many of the subsidies initiated. Though seemingly advantageous, the subsidies need not be beneficial. Thus, this paper will assess the impacts of state subsidies on the Chinese Steel industry and argue that subsidies have actually been detrimental than beneficial.