Industrial accumulation results from the free moving and free configuring of productive factors. It is inevitable that industries are highly concentrated in a particular area under the market economy conditions. Because agglomeration can promote economic development and enhance regional competitiveness, finding out the evolution laws of aggregation helps develop appropriate regional strategies and industrial policies. The government guided industrial agglomeration in the planned economy period, and the industrial structure was inefficient. In the process of transferring the planned economy to a market economy, the fluidity of product factors has been enforced; Many industries’ locations are guided by economic rules instead of government-planned policy, and industrial layout has changed dramatically. Vlogger Faire
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New Economic Geography theory suggests that the industrial agglomeration and regional integration take on a reversed “U” curve under the interaction between the scale of economy and transportation costs; that is, inter-regional transport costs continue to decline with the development of the market economy, and the geographic layout of industries will be dispersed after gathering.
This paper analyses the location selection and geographical evolution of different industries based on the theory. This paper obtained a relatively complete and detailed evolution trend of the industrial agglomeration by calculating the EG index and CR3 of 18 industries in China through 15 years. The results showed that many manufacturing industries indexes increased, which was consistent with their CR3s, such as the chemical fiber manufacturing industry, electronics and telecommunications equipment manufacturing industry, instrumentation and Cultural office machinery manufacturing, textiles, electrical machinery, and equipment manufacturing industry, food processing and manufacturing, paper and paper products industry, chemical fuel, and chemical products industry, which belong to technology-intensive and labor-intensive sectors. But there are also some industries whose EG indexes remain unchanged, such as beverage manufacturing, oil processing, and coking industry, pharmaceutical manufacturing, fabricated metal products, ferrous metal smelting and rolling processing industry, non-ferrous metal smelting, and rolling processing industry; these industries are resource-intensive industries.
Surprisingly, the machinery and equipment manufacturing and transportation equipment manufacturing industry, which have obvious economies of scale, hardly increased in EG indexes and CR3s; this may have limited rationality during our country’s market-oriented reform process. Regarding the areas where industries agglomerated, the eastern regions became the biggest area while other sites declined in concentration. The Northeast of China experienced the biggest drop; eastern areas have replaced the dominance of many sectors. Central regions also had a slight decrease in industrial concentration. Regarding northwest and southwest China, no matter past or present, their industrial agglomeration level was the lowest, and as time went by, this level became further low. Tibet, Qinghai, Ningxia, Xingjiang, etc., almost have no manufacturing industries.
Based on the calculation of agglomeration rates of 18 industries, the paper analyzed why different industries performed different evolution trends. The main conclusions includeFirstly that endowment advantages impact industrial location by naturally adding acquired benefits of a certain area. Secondly, generally speaking, the domestic market integration is increasing, which reduces inter-regional transportation costs and promotes industrial agglomeration. Thirdly, the level of international market integration is higher than the domestic market integration level. Many industries are concentrated in Eastern China because of strengthening external demands, foreign direct investments, and good market access.