Competitiveness of Local Traditional Industries towards Globalization: Cases from Wenzhou, Zhejiang Province
2002, 21 (4):
The development models in the rapid growth areas along China coast after reform and opening up to the international market include two models, one of which is called the Jiangsu-Zhejiang model. This means that the principle power for economic development in these regions mainly relies on regional and domestic markets rather than on oversea ones. The economic development of the township enterprises and the coordination between the internal and external regions are the two characteristics in Zhejiang Province and Jiangsu Province. The local industrial clusters in Wenzhou, Zhejiang province, which has generated high rate of regional economic development, are now confronted with new challenges in the globalization age, because most local enterprises are middle and small sized ones and are engaged in traditional industrial productions, such as shoes, glasses, clothes and other commodities. However, the globalization will consolidate the important role of locally industrial system played in the regional development, rather than weaken it as some people have supposed to be. The main concern of this paper is firstly devoted to discuss the features of local networks in Wenzhou city, and then by employing the two cases, it is argued that local industrial clusters can maintain and further improve their competitiveness by expanding their national and global networks which are deeply embedded in local networks, as well as by keeping the dynamic capability of learning and innovation which is oriented to upgrade the local traditional industry. Furthermore, it is suggested local enterprises to develop networks which represent a set of selective and explicit linkages between one firm and others with which it has technological and marketing relations as well as other social and cultural linkages, aiming at mutual advantages. Such linkages may take a material or a non material form and include supplier user relationships, subcontracting, production sharing, joint ventures, licensing agreements, and R&D collaboration, etc. This finding has important implications for the regional development and industrial structure adjustment ongoing in China.
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