Specialized Markets in China
Chapter 9: The Logic of Quantitative Expansion and Qualitative Upgrading in the Market Platform Mode Cluster
9. The logic of quantitative expansion and qualitative upgrading in the market platform mode cluster Source: The author. Figure 9.1 Numerous local brands gathering in Zhaoshang City 9.1 INTRODUCTION Concerning East Asia’s industrial clusters, Sonobe and Otsuka (2004) assert that both the clusters in mainland China, which have specialized markets, and clusters in Japan and Taiwan, which do not have specialized markets, have shown a development process that moves from a “quantity expansion phase” to a “quality improvement phase.” During this process, 151 M2920 – DING 9781781006276 PRINT.indd 151 20/06/2012 13:15 152 Market platforms, industrial clusters and small business dynamics along with the appearance of leading companies, a large number of SMEs are either integrated into their supplier network, or eliminated through competition. The empirical data concerning Chinese clusters, however, did not necessarily support this viewpoint. Within the children’s wear cluster of Zhili, Zhejiang, which Sonobe and Otsuka consider has entered the quality improvement phase, the number of children’s wear firms increased from 5700 to 8000 during the period September 2006 to September 2008.1 The industrial upgrading of this cluster has been clearly accompanied by quantitative expansion. A similar phenomenon can be observed in various specialized-market-based clusters in China. In the author’s opinion, the reason why Sonobe and Otsuka’s study cannot exactly explain China’s experience is that it failed to recognize two fundamental differences between Japan, Taiwan and mainland China. The first difference is that the Japanese and Taiwanese clusters on which their study focused are in merchant mode. China’s...
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