2007qyczhy6z1a22

Development

LI Liangzhi

Business & Management School, Jiangxi University of Finance and Economic, P.R.China, 330013

Abstract One of the options to achieve coordinated regional development is to promote the industrial transfer between various regions. It is imperative to respect the fundamental role of the market in allocating resources and put the macro-control function of the government into full play therewith. The idea of adopting industrial transfer to promote coordinated regional development is mainly intended to improve market-oriented mechanism, strengthen cooperation mechanism, combine industrial policies and regional policies, follow the principle of balancing spaces and improving ecological efficiency and give full scope to bonding role of the rising middle region in inter-coordinated regional development as well.

Keywords Industrial Transfer Coordinated Regional Development Division of Labor

1 Introduction

Industrial transfer and regional coordination appear to be two economical subjects independent from each other and bear no close correlation, however, actually they are closely linked together. The Report of the Fifth Congress of the CPC has indicated expressly that the state should give greater support to the western and middle regions to improve industrial policies and press ahead the effort of resolving irrational repetitive construction and convergent trend of the industrial mix.The Opinion of the CPC Central Committee on Formulating the 11th Five Years Program for National Economy and Social Development further puts forward that it is imperative to improve market mechanism, break up the restriction of administrative regional divisions, promote the free flow of production elements and guide the industries transfer.The new highlight of the regional economic development between the 11th Five Years, viewed from overall situation, should be a new round of inter-regional cooperation. Compared with 80s of last century, the new-round regional cooperation is supposed to be guided by enterprises instead of being guided by local governments of various levels. Under this situation, how the local governments create sound conditions for inter-regional activities of businesses stays a problem worth serious consideration. Nowadays, the law of regional economic development has taken shape initially. The pattern of interactive development between the eastern, middle and western regions has gradually formed, the eastern region transferring industries to the middle and western regions while the latter two absorbing the industrialized technologies transferred from the eastern region. According to general experience, when developed provinces in the eastern region of China reach GDP per capita ranging from USD 5,000~6,000, it is necessary to adjust the internal industrial structure and industrial layout. Presently, the eastern region has achieved this pushing force; while the majority of middle and western regions have approached certain absorptive capacity via about a decade years’ preparation. This macro-background is the basic starting point for carrying out the theoretical thinking of the internal combination of industrial transfer and coordinated regional development.

2 Macro-background for Coordinated Inter-regional Development

2.1 Analysis on the status quo of regional economic development

In recent years, various regions in this Country, according to unified deployment of the Central Committee, have taken effective measures to speed up development based on objective situations respectively, and consequently maintained sustained and fast development, and made new achievements in economic structure, regional structure and urban-rural structure as well, which is showed in, firstly, total economic amount, sustained & stable development of various regions; secondly, further

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optimization of regional structure and basic formation of some economic concentration areas; thirdly, increasing close association between various regions and obvious strengthening of inter-regional linking; fourthly, the basic formation of the pattern for promoting inter-coordinated regional development. Presently, the policy framework of inter-coordinated regional development featuring omnipresent opening up of coastal and inland regions, grand western development, rejuvenation of old northeastern industrial bases and emergence of middle region as keynote, have already taken shape initially. 2.2 Analysis on the regional economic development trend between the 11th Five Years period

It is foreseeable that the following trend on regional economic development will appear during the th

11 Five Years period: Firstly, integrated development of regional economy will keep on speeding up and some metropolitan circles will emerge accordingly. On this basis, competition between different regions will not appear to be competition of single cities, but integral competition of various regions based on metropolitan circles. This type of competition will lead to progressive increase of regional concentration of production and product innovation; and may cause vicious competition of different regions as well. New regional relationship may be a competitive one joined with cooperative elements; secondly; the step of industrial transfer will keep on speeding up further. The transfer of international industry links has shifted from the transfer of processing & manufacturing to that of whole industrial links including headquarters, marketing agencies and operating centers etc. Industrial transfer of trans-nationals has improved the whole technological level of manufacturing of this Country, and promoted the upgrade of export competitiveness and optimization of export structure. Furthermore, industrial entry of trans-nationals on such a large scale has also push forwards the pluralism of competitive subjects and promoted business competition and hence produced active demonstrative effect of competition among domestic enterprises; some domestic enterprises acquired learning opportunities in the course of industrial & technological transfer from trans-nationals and strengthened capacity of participating international competition. However, on the other hand, with their powerful competitive advantages, trans-nationals have possessed relatively higher market share and thus formed a certain degree of business monopoly, and in turn, suppressed the increase of competitiveness and market share of domestic businesses. Against this background, domestic industrial transfer will increase accordingly. Thirdly, Mosaic phenomena in regional economy will become more and more widespread. Currently, many localities have put adequate emphasis on industrial concentration areas/groups, the total of which amounts to competitiveness of the regional economy, and has given rise to the tendency of specialty development of various localities. Fourthly, labor division among various regions and that of production links will become more and more elaborate and even lead to some new types of industrial division of labor, which is the source of wealth increase. The division of labor between various regions and that within industrial links will extend gradually. The tendency of industrial development may involve more and more regions into the division of labor. Meanwhile, industrial transfer will also be affected by this trait, and a part of manufacturing link will probably account for a considerable amount of proportion. Fifthly, the economic heart of this Country will shift to coastal area further.

3 Influence of Industrial Transfer to Coordinated Regional Development

Although the economic heart will further shift towards coastal areas and the industrial transfer of eastern industries to the middle and western regions is still positioned at the starting stage, it has showed thriving life and vitality. No matter for the adjustment of regional industrial structure, or for the promotion of coordinated development of regional economy, the industrial transfer will play an important role without dispute.

(1) Through two decades of rapid development, many economically developed localities in the eastern region are now faced with increase of prices of many production means as water, power supply, raw materials, fuel transportation and capital etc. and daily increasing investment & operation cost, as lead to gradual loss of cost advantages of labor-intensive industries. Objectively, life periodicity of industries requires the industries that are about to lose advantages in the eastern regions shift to the middle and western regions. Therefore, on the one hand, the structure ageing of coastal industrial bases may be prevented to avoid inadequacy of intensity; on the other hand, the middle and western regions

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can hence have more capital and development opportunities while a considerable scale of industries enter into the market to promote the local economy.

(2) In the course of industrial transfer, capital of various localities can cross administrative divisions and be combined, merged, re-organized, purchased, organized into group enterprises, listed in stock market and held as shares etc. in various property right exchange activities, therefore, the optimized combination of production means within industries and between regions can be enhanced. This trend has virtually promote the adjustment of regional property right structure, activate stock capital and cause a considerable amount of assets lying idle or at low rate of utilization to flow, thus increasing the allocation efficiency of resources, giving full rein to economic advantages of various regions. It also bears great significance to social productivity development and progressive increase of labor production ratio, reduce repetitive construction and avoid convergence of regional industrial structure.

(3) Industrial transfer has further enhanced the close economic ties and intercourse between the eastern region and the middle & western region, strengthened inter-regional labor division & coordination concept, and hence extended widely horizontal economic association. Various localities will have to put emphasis on the full play of local advantages and cross-regional coordination. Furthermore, inter-business connecting efficiency caused by industrial transfer shall be conducive to breaking blockade and monopoly between departments or regions and breaking through administrative barriers against flow of production means so as to promote coordinated development of regional economy.

4 Conclusion

4.1 Improving market mechanism is an important precondition for pushing industrial transfer and promoting coordinated regional development The Decision of Improving Socialist Economic System by the Third Plenary Session of the CPC th

16 Congress proposed the vision of eliminating regional barriers. The Suggestion of the CPC Central Committee on Formulating the 11th Five Years Plan for National Economy and Social Development proposed further to improve market mechanism and break restriction of administrative divisions in order to promote the free flow of production means inter-regionally and guide the industrial transfer effectively.

(1) Adhere to the fundamental role of market in resources allocation, break further the administrative monopoly and regional blockade, improve unified open market country-wide, push modern circulation mode. Develop production means market as land, technology and labor force further, regulate the development of various types of intermediate agencies, improve forming mechanism of product and production means prices;

(2)The middle and western regions shall actively shift the economic management function of governments

to planning and guiding policy orientation and serving market subjects to create sound regional development environment, and maintain market order of fair competition and thus create sound environment for industrial transfer; and

(3) Further carry out system reform to promote flow of labor force and reduce flowing cost of labor force so as to safeguard the rights and interests of laborers.

4.2 Improve cooperation mechanism and push forwards horizontal association of various regions. Lateral economic association between regions is an important channel for industrial transfer.

Human resources capital keeps on increasing while resources fall gradually short. The majority of middle and western regions may take advantage of this opportunity to turn resources advantage into economic advantages. The eastern region, with ample capital, can take part in the merger and purchase of western enterprises and greatly promote the re-organization and re-shuffle of western enterprises so as to deepen industrialization of western region and meanwhile promote the coordination of regional economies. Furthermore, in the aspect of industrial layout and industrial groups building-up, regional economic cooperation may enjoy significant space as well.

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4.3 Combine the regionalization of industrial policies and the industrialization of regional policies to form a coordinated mechanism combining industrial development and regional development.

On the one hand, regionalize the industrial policies, and shift the regional-favoring tendency to the industrial-favoring one. In the meantime of enhancing investment support towards the middle and western regions, keep in mind to unify the adjustment of economic spatial pattern and the adjustment of industrial structure, and unify the regional coordination and industrial transfer. It is imperative to fully consider requirements of specialization/professionalization of regional policies, i.e. the state shall, guided by the state industrial policies in formulating and implementing regional policies, fully consider requirements of specialization of industrial development, intensification & coordination of industrial structure and size efficiency to achieve upgrade and optimization via adjustment of regional policies. 4.4 Regional regulation on industrial transfer shall follow the principle of spatial balance and ecological efficiency.

(1) Follow the spatial balance principle. This principle is intended to distribute population, employment and economy within a certain space and adapt them to the resources environment situation of this space. It mainly includes that; firstly, economy must be in harmony with population in a certain space; secondly, economy, population and resources must be in harmony with each other in a fixed space; among which the most important one is the harmony with water resource. To the north of Huaihe River, water resource takes up 19.5% of whole China, while population 46.5%, GDP 45.2% and farmland .8%, the economy is in harmony with population, however, distribution between water and population and that between water and economy are severely unbalanced; thirdly, economy, population and environment shall be in harmony with each other. Businesses consuming too much water are not suitable to move to a region short of water.

(2) Follow the ecological efficiency principle. China is a country with a large population, short resources and weak ecological environment, therefore, without following ecological efficiency principle, it must be very difficult to achieve sustained development. For example, automobile industry is a very prospective one, to develop an automobile manufacturer in a place of high development intensity, may prove competitive currently; however, employment and population will flow therewith as the manufacturer comes over, then the contradiction of water resource shortage or ecological environment will aggravate and eventually prove not sustained.

(3) Follow the regional regulation principle to suit local circumstances. According to The Suggestion of the CPC Central Committee on Formulating the 11th Five Years Plan for National Economy and Social Development, based on general regional division of eastern, middle and western, it is advisable to make clear major functions and development principles of various regions. It is imperative to restrict development activities properly in ecologically weak areas, natural forests, water resource reserve areas and other types of natural reserve areas. Regulation on industrial transfer shall be gradually shifted from regulation of total industrial amount to that of spatial layout.

4.5 Give full play to the bonding role of the middle region in the inter-coordinated regional development and promote the industrial gradient transfer.

The middle region is an important bond between the western region and the eastern region in forming industrial labor-division & coordination relationship. Without a middle transition, the radiation of the eastern region to the western one will be of no significance, while the eastern industries may have no place to set foot and it would be difficult to form interactive and connecting development situation. Therefore, it is necessary to give full scope to the bonding function of the rising middle region in the industrial transfer and coordinated regional development.

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