Essays on Guangdong Province in China - Industry Analysis Case Study

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The paper "Guangdong Province in China - Industry Analysis" is a great example of a business case study.   Guangzhou is a manufacturing hub located in Guangdong province in China which has grown tremendously due to globalization and urbanization. This report will look at the critical success factors for the growth of the city and its effect on China and the global trade. Guangzhou’ s location as a port city has enabled it to attract global foreign trade with the city witnessing over $ 90 billion worth of trade annually. Over 170 of the global Fortune 500 companies have established a base in the city and thus this has boosted the city’ s reputation as a world-class manufacturing centre.

Business data from the Chinese government and other institutions such as the World Bank outline a growth of business and export numbers from Chinese producers. Guangzhou contributes to the bulk of these export numbers and growth of these numbers is likely to increase as China GDP and the economy grows. The main industrial sectors that are likely to benefit from this growth are the Petrochemical, Automobile and Information Technology based industries.

This report will analyze the critical success factors and other factors that contribute to the growth of Guangzhou as a global manufacturing hub. Industry Analysis Manufacturing has experienced increased global growth especially within previously underdeveloped regions of Latin, Asian and African regions. Growth in these areas has necessitated the growth of manufacturing to service the growth of these regions. From the economic data, we witness that the industry has been growing gradually over the last decade based on output values. For instance, the manufacturing industry’ s output grew from ¥ 178.7 billion in the year 2001 to ¥ 850.6 billion (Cheng 2009).

Manufacturing in Guangzhou is mainly catered for the export market and thus growth witnessed in other regions has also had a complementary effect on the growth of Guangzhou manufacturing sectors. The data and output figures are outlined by the figures in table 1 in the appendix section. From the table, all the major manufacturing sectors in Guangzhou are outlined with output figures (SSB 2013). The data outlined in the table points to a growing trend of growth within different sectors.

For instance, the information and technology sector and the automobile industries represent the highest growth manufacturing sectors in Guangzhou (Eltschinger 2012). These two sectors outperformed the average growth numbers within the manufacturing sector in Guangzhou. This is best outlined by the Figure 1 in the appendix section which shows the average performance of different sectors against the general performance of the manufacturing industry. There are several factors that aid the growth of the manufacturing industry in Guangzhou as outlined; Technological advancement: Guangzhou has witnessed the growth of technology within the manufacturing industry leading to increased efficiency and output.

For instance, more young and innovative Chinese people are being absorbed into the manufacturing industry. As a result, Guangzhou has been able to attract technological innovative companies and people into the manufacturing sector (Wu 2013, p. 75). Economic growth: China and other regions have witnessed economic growth that has led to increased consumer spending as outlined by the growth of the Chinese export market. This economic growth has been phenomenal in supporting the Chinese manufacturing sector since the affordable Chinese goods have been successfully been exported overseas (Marshall 2013). Political support: Chinese manufacturing sector is supported by the government through several initiatives such as fiscal monitoring and economic incentives.

For instance, the government has ensured that the value of the Chinese Yuan remains low compared to other global currencies while at the same time setting up economic zones within cities such as Tianjin, Shenzhen and Guangzhou whereby the cost of production is low (Pennington 2012). Local Industries: China has a long tradition for homegrown industries that has been a base for the emergence of new manufacturing centres to support the urban population and the growing export market.

The location of these industries has aided manufacturing since they were located in Asia and close to other growing economies of Eastern Europe and Africa (Ebanks 2012, pp. 30-37).

References

Cheng, L & Kwan, Y 2009, Foreign capital stock and its determinants: In Foreign direct investment and economic growth in China, Eward Elgar, Cheltenham, UK.

China Internet Information Centre (CIIC) 2014, A brief introduction of National Economics and Technological Zones in China. Available from: http://www.china.org.cn/english/

Ebanks, G & Cheng, C 2012, “China: A unique urbanization model”, Asia-Pacific Population Journal vol. 5, no. 3, pp. 29–50.

Eltschinger, C 2012, Source Code China: The New Global Hub of IT (Information Technology) Outsourcing, John Wiley & Sons, New York.

Guldin, E & OECD 2010, OECD Territorial Reviews OECD Territorial Reviews: Growth of Guangzhou, UN Publications, New York.

Marshall, R 2013, Emerging Urbanity: Global Urban Projects in the Asia Pacific Rim, Routledge, London.

Pennington, M 2012, China Economic Review's China Business Guide 2012, SinoMedia (Holdings) Co. Ltd., Beijing.

SPORT-c/76751.htm (accessed April 2015).

State Statistical Bureau (SSB) 2013, China Statistical Yearbook 2013, China Statistical Publishing House, Beijing.

Wong, S & Tang, B 2010, “Challenges to the sustainability of ‘development zones’: A case study of Guangzhou Development District, China”, Cities, vol. 22, no. 4, pp. 303–316.

Wu, F 2013, “Intrametropolitan FDI firm location in Guangzhou, China”, Journal of Contemporary China, vol. 34, no. 3, pp. 67-78.

Xiaohu, T 2014, Building a Successful Plant in China, China Knowledge Press, Shanghai.

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