Market Platforms, Industrial Clusters and Small Business Dynamics

Market Platforms, Industrial Clusters and Small Business Dynamics

Specialized Markets in China

Ding Ke

Specialized markets are a unique product of China’s economic transition. They are marketplaces located in industrial clusters, specializing in the wholesale of local commodities and related goods. Ding Ke reveals that, despite their seemingly primitive form, specialized markets appeared in many of the modern industrial sectors and were paradoxically upgraded and expanded as these clusters developed. He argues that specialized markets have also formed solid linkages with marketplaces in various cities in China and in other developing economies. A powerful, emerging market-oriented distribution system has thus appeared. Based on thorough fieldwork covering ten years, and using the novel theory of the platform, this book clarifies the unique development logic of specialized markets.

Chapter 3: The General Situation in the “Province of Markets”

Ding Ke

Subjects: asian studies, asian development, asian economics, development studies, asian development, development economics, economics and finance, asian economics, development economics, industrial economics, urban and regional studies, clusters


Source: Copyright © 2006, Huang Xiaochun. Figure 3.1 A booth in Shaoxing China Textile City 3.1 INTRODUCTION1 The specialized market first made its appearance in Wenzhou, Zhejiang Province in the 1970s. As one of the main factors of the Wenzhou Model, a typical model of China’s rural industrialization, specialized markets have provided a platform that acts as an interface to match the large numbers of domestic factories in the industrial clusters in Wenzhou with the 100,000 Wenzhou salesmen,2 who are dispersed throughout various locations in China (Yuan 1987; Fei and Luo 1988; Zhang and Li 1990; Komagata 2004). 31 M2920 – DING 9781781006276 PRINT.indd 31 20/06/2012 13:15 32 Market platforms, industrial clusters and small business dynamics From the 1980s, the specialized markets expanded rapidly from Wenzhou to the whole of Zhejiang Province. Between 1978 and 2003, the total number of marketplaces in Zhejiang, including specialized markets and other markets, increased from 1322 to 4036 (ZUESRG 2007, p. 35). Accordingly, the domestic retail share of products originating from 52 Zhejiang industrial clusters amounted to over 30 percent of China’s total retail volumes for those products in 2002 (Jin 2004, p. 13).3 Almost all of these industrial clusters formed strong links with specialized markets. Zhejiang was thus called the “Province of Markets.” This chapter attempts to overview the general situation in the specialized markets of Zhejiang, and thus clarifies the characteristic features of the development of China’s specialized markets. The first half will indicate the characteristics of some of the...

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