China's industrial clusters will lead you to a better sourcing performance
Clustering is the phenomenon where firms from the same industry gather together in close proximity. If 99% of factories making a particular product are concentrated in one region, you can be sure there is a competitive advantage to them being there .We will lay out the differences in China’s regional development and how that may play into your sourcing decisions.
In the past 30 years, China has achieved phenomenal economic growth, an unprecedented development “miracle” in human history. Since the institution of its reforms and Open Door policy in 1978, China’s gross domestic product (GDP) has been growing at an average annual rate of more than 7-9 percent . In 2010, it has surpassed that of Japan and become the world’s second-largest economy.
The industrial clusters have been a driving force for making Chinese products very competitive in the global market . The Chinese government has been aggressively promoting the establishment of his cluster hubs all around China by building first class infrastructure , providing incentives, training and financing , encouraging entrepreneurs to invest , attracting Foreign direct investment ..etc. These policies have created millions of job and made china a wealthy nation.
Among the top 100 industrial clusters , around 80% are located in the coastal provinces. Most of them are located in Zhejiang , Jiangsu , Guangdong , and Shandong provinces, these 4 provinces account for 60% of the top 100 clusters in 2010.
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