Transcript Industrial Deglomeration - Cheung Chuk Shan College

Industrial Deglomeration
A case study of China
What is industrial de-agglomeration?

Deglomeration occurs when companies and
services leave because of the diseconomies of
industries’ excessive concentration. Firms can
achieve economies because of the increase in
scale of industrial activities benefited from
agglomeration. However, after reaching the
optimal size, local facilities may become overtaxed, lead to an offset of initial advantages and
increase in PC. Then the force of agglomeration
may eventually be replaced by other forces which
promote deglomeration. (Diversification of an
industry in the horizontal relations between
processes within the plant.)
How does industrial de-agglomeration
occur?
Short-distance intra-city dispersal
 Long-distance dispersal – at
regional/national level or international
level

Intra-city dispersal
From city areas to outskirts
 Suburbanization of industries
 Out-of-town movement of industries

Examples in Hong Kong
Long-distance dispersal
Regional/national level
 From one part of a country to another
 Dispersal to new regions
 From more prosperous regions to less
prosperous regions

Industrial decentralization in 1950s
Go West Policy, 1999
Long-distance dispersal
International level
 From one country to another
 From MDCs to LDCs/NICs
 From LDCs to MDCs
 Cross-border or overseas
 Multi-national

Factors for industrial deglomeration
Industrial diseconomies
 To capture a wider market
 To utilize raw materials from widely
dispersed sources
 To benefit from the incentives offered by
the government
