Spatial Distribution of Industries in the Jing-Jin-Ji area

To investigate the locational pattern of industries and identify the industrial clusters in the Jing-Jin-Ji area, this study maps the spatial distribution of selected industrial employment by county and district using data from the first economic census conducted at the end of 2004. Some representative industries are selected, including mining of petroleum and natural gas, mining of ferrous metal mineral, nonmetal mineral products, metal mineral products, food manufacturing, textile, general-purpose equipment, special purpose machinery, transportation equipment, medical and pharmaceutical products, telecommunication and electronic equipment, instruments, meters and office machinery.

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Mining industries are located close to natural resources since they exploit natural resources which are difficult to ship for a long distance (Figure 10). Employment in mining of petroleum and natural gas is highly agglomerated in Tianjin, Cangzhou and Tangshan and employment in ferrous metal mineral mining industry is concentrated in the western and northern mountain areas, including Zhangjiakou, Chengde, Tangshan and Handan. The spatial pattern of employment in ferrous metal smelting and pressing follows the ferrous metal mineral mining industry. Beijing and Tianjin have strong presence of employment in ferrous metal smelting and pressing owing to the legacy of the commanding economy.

Figure 10 County distribution of employments in petroleum and natural gas mining (left), ferrous metal mining (middle), and ferrous metal smelting and pressing (right)

Sources: The First Economic Census of P.R. China (2004)

Nonmetal and metal mineral products are resource-processing industries.

Nonmetal mineral resources are widely distributed in the Jing-Jin-Ji area and

employments in nonmetal mineral products are also widely distributed, especially in Beijing, Tianjin, Tangshan, Shijiazhuang, Zhangjiakou, Qinhuangdao and Handan.

Geographical proximity to resources and markets is the key locational factor for nonmetal mineral products. Employments in metal mineral products are highly agglomerated in the industrial corridor along Beijing-Langfang-Tianjin. Industry of metal mineral products demands a large amount of intermediate inputs from ferrous and nonferrous mineral smelting and pressing. Metal mineral products also need geographical closeness to the consumer markets in Beijing and Tianjin (Figure 11).

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Figure 11 County distribution of employments in nonmetal mineral products (Left) and metal mineral products (Right)

Sources: The First Economic Census of P.R. China (2004)

Food manufacturing industry and textiles are typical labor-intensive industries.

Food manufacturing industry requires geographical proximity to consumer markets and to agricultural products, and is therefore relatively dispersed. It is distributed in the northern mountain areas and in the southern plain areas, but still concentrated around the Beijing-Tianjin area. Employments in textiles are concentrated along the Beijing-Langfang-Tianjin corridor but are also spread out in the Southern Jing-Jin-Ji area and the central areas of Shijiazhuang and Handan. The spatial pattern of textile employments is fairly similar with that of ferrous metal smelting and pressing, which may be associated with the fact that governments planned textiles in the cities with strong ferrous metal smelting and pressing to reduce the gender gap in employments (Figure 12).

Figure 12 County distribution of employments in food manufacturing (Left) and textiles (Right)

Sources: The First Economic Census of P.R. China (2004)

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Machinery and equipment manufacturing industries are capital and

technology-intensive industries. Theoretically speaking, those industries are highly agglomerated since related firms are concentrated to take advantage of internal scale economies and localized industrial linkages to reduce production and transportation costs. They also need to locate close to research& development and high quality workers. As shown in Figure 13, employments in machinery and equipment manufacturing are significantly agglomerated in major cities including Beijing, Tianjin, Shijiazhuang and other prefecture level cities. On the one hand, Beijing, Tianjin, Handan and Tangshan have strong presence of ferrous and nonferrous metal smelting and pressing, which provide localized intermediate goods to machinery and equipment manufacturing; on the other hand, Beijing and Tianjin are the major markets for equipments and machinery. Compared with transportation equipment and special purpose equipment, general-purpose equipment manufacturing is more spatially dispersed because transportation equipment and special purpose equipment are more capital and technology intensive, and demand highly skilled workers and also need to be on the markets of Beijing and Tianjin.

Figure 13 County distribution of employments in general purpose equipment (left), special purpose machinery (middle) and transportation equipment (right) Sources: The First Economic Census of P.R. China (2004)

Finally, medical and pharmaceutical products, telecommunication and electronic equipment, and instruments, meters and office machinery are so-called high-tech industries. High-tech industries are often highly agglomerated in major cities owing to knowledge spillover effects and sharing labor pool and professional services. As expected, high-tech industries are mainly concentrated in the Beijing–Langfang- Tianjin area (Figure 14). Employments in those industries are also dispersed in the major cities in Heibei. Medical and pharmaceutical products are considered a key industry with huge demand potential in many cities and are strongly favored by local governments. On the one hand, each prefecture level city has some employments involved in medical and pharmaceutical products. On the other hand, Beijing, Tianjin

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and Shijiazhuang are the major production bases of medical and pharmaceutical products in the Jing-Jin-Ji area, accounting for some 70% of total employments. Low value added functions are located in counties and prefecture cities while high value added functions are concentrated in major cities, which are technologically advanced and with skilled workers. Employments in telecommunication and electronic

equipment, and instruments, meters and office machinery are particularly concentrated in Beijing and Tianjin. Strong industrial linkages and favorable industrial policies are responsible for industrial clusters in those industries. Many development zones such as Beijing Economic and Technology Development Zone, Zhongguancun Science Parks, Tianjin Economic and Technology Development Zone, and Langfang Economic and Technology Development Zone have targeted the capital and technology intensive industries and granted favorable tax and fiscal policies to related companies.

Figurer 14 County distribution of employments in medical and pharmaceutical products (left), telecommunication and electronic equipment (middle) and instruments,

meters and office machinery (right) Sources: The First Economic Census of P.R. China (2004)

Overall, industries are highly agglomerated in the Beijing-Tianjin area meanwhile significant differences in industrial locations are also present. The locational patterns of industries in the Jing-Jin-Ji area are the results of combination of several location factors.

Natural resource endowment

The Jing-Jin-Ji area has hosted many resource-intensive or resource-based industries such as mining industries, petroleum processing and coking, ferrous metal smelting and pressing, nonmetal mineral products, chemical materials and products.

Spatial patterns of natural resources have largely determined the locational patterns of those industries, either clustering in the mountain area or the coastal area.

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High profile production factors

Many capital and technology industries, high-tech industries and

knowledge-intensive services are clustered along the Beijing-Langfang-Tianjin

industrial corridor. These modern industries demand highly skilled and R&D workers, information and knowledge, and producer and professional services. Advantages in high profile production factors in Beijing and Tianjin allow the development of high value added manufacturing and service industries.

Industrial linkages

Major cities such as Beijing and Tianjin develop strong capital and technology industries including telecommunication and electronic equipment, transportation equipment, machinery and equipment. Strong industrial linkages have promoted the expansion of those industries. For instance, the Shunyi district has attracted more than 30 suppliers of car components and parts since the introduction of Korean Hyundai in 2002. Some are from South Korea and have established strong business linkages with the Korea Hyundai for a long time. There are about 18 suppliers located in other districts and counties in Beijing. Hebei and Tianjin each has 4 suppliers of

components and parts for Hyundai (Figure 15). The Xinwang industrial park in the Beijing Economic and Technology Zone houses a manufacturing cluster of mobile telecommunications equipment centered on Nokia (Yeung et al., 2006).

Suppliers

0 2 4 6 8 10 12 14

Shunyi Miyun

Pinggu Chang

pin g Huair

ou Tongz

hou Fangs

han Heibe

i Tianjin

Jilin Liaonin

g Shandon

g Jiang

su Shang

hai Zheji

ang

Figure 15 Spatial distribution of auto parts and components suppliers for Hyundai in Shunyi

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Agglomeration economies

Agglomeration economies are cost-savings from geographical concentration of related firms. The cost-savings are derived from the sharing of labor pool,

professional and producer services, infrastructure, intermediate suppliers, and information and knowledge spillover effects. The externalities are critical for the development of high-tech industries and professional services in Beijing, Tianjin and Shijiazhuang. Industries dependent on seaports also benefit from agglomeration economies associated with seaport services.

Market demand

Locational theories suggest that interactions between transportation costs and scale economies stimulate industries to concentrate in large markets. As

mega-metropolitan areas, Beijing and Tianjin are huge demand markets for products of capital and technology intensive industries such as transportation equipment, computer and other electronic equipment, electric machinery and equipment. Many producer services such as information and technical services, computer-assistant services, finance, advertising and logistics are also agglomerated in Beijing and Tianjin to serve corporation headquarters and other institutions.

Transportation accessibility

The Jing-Jin-Ji area is a hub of transportation in the northern China, linking with the whole country and with international markets through seaports and airports.

Beijing, Tianjin and Shijiazhuang are located in the intersections of national highways and railways. The Jing-Jin-Ji area imports and exports through seaports in

Qinhuangdao, Tangshan, Tianjin, and Canzhou, facilitating the development of heavy industries in the seaport cities. Highways and railways also broaden the accessibility of domestic markets, concentrating industries in the cities along the national

transportation routes, such as Beijing, Shijiazhuang and Baoding.

Policy

During the transition period, central and local governments set up many types of development zones to attract investment and to concentrate industries, granting favorable fiscal and tax policies to firms. The Jing-Jin-Ji area, particularly along the industrial corridor of Beijing-Langfang-Tianjin has a large number of industrial parks or development zones, such as Zhongguancun Science Parks (including Changping, Chaoyang, Fengtai, Yizhuang, Haidian),Tianjin Economic and Technology

Development Zones, Beijing Economic and Technology Development Zones. The favorable policies to business have concentrated high-tech industries in the

development zones and industrial parks.

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3. Economic Linkages of the Jing-Jin-Ji Area with Northeast Asia