Port Cities and Trading Networks in China, Japan and Southeast Asia, 13th–21st Century
Chapter 13: The East Asian Manufacturing Belt
13. The East Asian manufacturing belt During the 1990s, the impact of inter-Asian trade was felt across China’s coastal provinces. These areas became integrated into a network of international subcontracting, abundantly irrigated by streams of foreign capital.1 Capital flows, technology and human interaction were focused on the great hubs that served as anchorage points: Hong Kong, Shanghai, Peking and, soon perhaps, Tientsin. As we have seen in the previous chapter Chinese cities, by the very nature of their history, have nevertheless undergone a different type of development from that of their homologues in Europe, where cities have created spaces of liberty and autonomy. How can Chinese cities evolve from a relatively passive status of re-exportation hubs to one of fully-fledged players in worldwide competition? By absorbing the overwhelming majority of foreign investments and international subcontracts signed in China, the seafront has become a manufacturing belt, driven by Asian companies. This evolution provides the backdrop for a profound change in production systems, operating on three fronts: relocation of all labour-intensive operations, outsourcing of any tasks outside the company’s core competencies and globalisation of supply sources. PREFERRED DESTINATIONS FOR RELOCATION The decision to relocate was, for a long time, governed by the question of labour costs. The strategic rationale was based on arbitration of wages levels, since relocation took place, for the most part, in developing countries. This configuration of labour at a worldwide level has been somewhat disrupted by recent developments in outsourcing. Reduction of labour costs remains an important objective,...
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