Industrial Clusters in Asia Analyses of Their Competition and Cooperation Edited by Akifumi Kuchiki and Masatsugu Tsuji Industrial Clusters in Asia This page intentionally left blank Industrial Clusters in Asia Analyses of Their Competition and Cooperation Edited by Akifumi Kuchiki and Masatsugu Tsuji © Institute of Developing Economies (IDE),JETRO 2005 All rights reserved. No reproduction, copy or transmission of this publication may be made without written permission. No paragraph of this publication may be reproduced, copied or transmitted save with written permission or in accordance with the provisions of the Copyright, Designs and Patents Act 1988, or under the terms of any licence permitting limited copying issued by the Copyright Licensing Agency, 90 Tottenham Court Road, London W1T 4LP. Any person who does any unauthorized act in relation to this publication may be liable to criminal prosecution and civil claims for damages. The authors have asserted their rights to be identified as the authors of this work in accordance with the Copyright, Designs and Patents Act 1988. First published 2005 by PALGRAVE MACMILLAN Houndmills, Basingstoke, Hampshire RG21 6XS and 175 Fifth Avenue, New York, N. Y. 10010 Companies and representatives throughout the world PALGRAVE MACMILLAN is the global academic imprint of the Palgrave Macmillan division of St. Martin’s Press, LLC and of Palgrave Macmillan Ltd. Macmillan® is a registered trademark in the United States, United Kingdom and other countries. Palgrave is a registered trademark in the European Union and other countries. ISBN-13: 978–1–4039–4350–7 ISBN-10: 1–4039–4350–8 This book is printed on paper suitable for recycling and made from fully managed and sustained forest sources. A catalogue record for this book is available from the British Library. Library of Congress Cataloging-in-Publication Data Industrial clusters in Asia : analyses of their competition and cooperation / edited by Akifumi Kuchiki and Masatsugu Tsuji. p. cm. “Project … coordinated and financially supported by the Institute of Developing Economies (IDE), Japan External Trade Organization (JETRO)”–Pref. Includes bibliographical references and index. ISBN 1–4039–4350–8 (cloth) 1. Industries–Asia. 2. Competition–Asia. I. Kuchiki, Akifumi. II. Tsuji, Masatsugu. III. Ajia Keizai kenkyujo (Japan) HC415.D5I53 2005 338.6(cid:1)042(cid:1)095–dc22 2005040231 10 9 8 7 6 5 4 3 2 1 14 13 12 11 10 09 08 07 06 05 Printed and bound in Great Britain by Antony Rowe Ltd, Chippenham and Eastbourne Contents List of Tables vi List of Figures ix Preface xi List of Contributors xii 1 Introduction 1 Akifumi Kuchiki and Masatsugu Tsuji Part I Industrial Clusters in Vietnam 2 Competition and Cooperation: Vietnam 27 Adam McCarty, Richard Record and James Riedel Part II Industrial Clusters in China 3 Industrial Clusters in the Tianjin Area 111 Zhang Donggang, Xie Siquan, Bai Xuejie and Luo Ruoyu 4 A Flowchart Approach 169 Akifumi Kuchiki 5 Chinese Automotive and Parts Industries 200 Masatsugu Tsuji and Wu Quan Part III Industrial Clusters and IT Industries 6 Can Malaysia’s Growth Be Sustainable? 225 Yumiko Okamoto 7 Bangalore’s Software Cluster 244 Aya Okada 8 The Local Economy: Lessons from Japan 278 Rika Nakagawa 9 Japan: Remedies to Activate Local Cities 299 Takuo Imagawa Index 319 v List of Tables 2.1 Vietnam total and manufacturing GDP by ownership: 32 1995 and 2001 2.2 Enterprises in Vietnam: a snapshot in 2003 33 2.3 Vietnamese export composition: 1995–2002 (percentages) 36 2.4 Vietnam’s trade-related infrastructure 37 2.5 International relative competitiveness in Asia, 2001 38 2.6 Comparative educational indicators, selected 41 economies, 1990 2.7 Vietnamese licensed FDI projects January–July 2003: 43 top five provinces 2.8 Vietnamese gross exports January–July 2003: 43 top five provinces 2.9 Examples of some world-class clusters 54 2.10 Vietnamese enterprise dataset used for GIS mapping and 61 analysis: labour and turnover 2.11 Vietnamese enterprise dataset used for GIS mapping and 62 analysis: ownership type 2.12 List of GIS maps produced of Vietnam 63 2.13 Cluster index of Vietnam – all 12 industries 91 2.14 Perceived role of clusters, selected Western and East Asian 104 economies 3.1 Comparison of the development characteristics of the 116 electronic information industry in six Chinese provinces and cities, 2001 3.2 Comparison of the degree of agglomeration in the electronic 117 information industry in six provinces and cities in 2001 3.3 Electronic industrial clusters in Tianjin 120 3.4 Output and output value of main products in the green 135 battery base in Tianjin 3.5 Distribution of Tianjin’s bicycle enterprises 155 3.6 Changes in the percentage of the output of bicycles in 157 Tianjin compared with that in all China 3.7 Changes of annual export volume of Tianjin’s bicycles 158 4.1 Tianjin’s industrial zones 181 4.2 Infrastructure of Tianjin Economic Development Area 183 4.3 Tax system of Tianjin Economic Development Area 184 4.4 Total output of the Chinese automobile industry, 1993 190 4.5 Total output of the Chinese automobile industry, 2001 191 4.6 Keiretsu companies of Toyota in Tianjin 192 vi List of Tables vii 4.7 Japanese companies related to Toyota in Tianjin 193 4.8 Summary of industrial cluster policy, Tianjin and northern 197 Vietnam 5.1 Major Chinese automobile assemblers 202 5.2 Number of automobile assemblers and parts suppliers in 203 concentrated regions of China 5.3 Eight major firms in the Chinese automotive sector, 1995 206 5.4 Concentration ratios in the automotive industry: 207 four-country comparison 5.5 Localization ratio of Santana 211 5.6 Major parts manufacturers in Shanghai 212 6.1 Regional shares of foreign and domestic investment 228 in Malaysia between 1993 and 2002 6.2 Market shares of Malaysia in major developed countries 231 6.3 RCA index of Malaysia 232 6.4 Spearman’s rank correlation coefficients of the RCA indexes 235 between Malaysia and some of its major trading partners 6.5 Spearman’s rank correlation coefficients of the market shares 235 between Malaysia and China in electronics products 6.6 Intra-industry trade (IIT) indexes between Malaysia and 236 China 6.7 Economic impacts of the MSC in Malaysia 238 6.8 Occupational grouping in Malaysia 240 7.1 Average annual software labor cost comparisons in 250 selected countries, 1999 7.2 Indian software firms’ global market penetration 251 7.3 Locational distribution of headquarters of India’s top 253 700 IT software and services firms, 2000 7.4 Growth of employment and revenue per employee in the 258 Indian software industry 7.5 IT-related jobs in demand in India 259 7.6 Higher education institutions offering courses related to 263 computers, all India and Karnataka 7.7 Growth in intake in IT-related courses in Karnataka 265 8.1 Number of manufacturing factories in Japan, 1985–2000 280 8.2 Number of industrial zones in China 282 8.3 Per capita income in each Japanese prefecture 284 8.4 Growth rates of per capita income in each Japanese 286 prefecture 8.5 Details of the Japanese industrial cluster plan 2001 288 8.6 Projects of industrial cluster planning in each Japanese 289 region 8.7 Details of support for the ICT industrial cluster in Okinawa 292 viii List of Tables 9.1 IT industry accumulation in Japan: summary statistics 308 (city data) 9.2 Estimation results of IT industry accumulation in Japan: 309 basic model (accumulation factor analysis) 9.3 Estimation results of IT industry accumulation in Japan: 310 influences of education facilities (education and proximity analysis) 9.4 Industrial classifications of the IT industry in Japan – 311 1: accumulation factor analysis 9.5 Industrial classifications of the IT industry in Japan – 312 2: educational facilities and proximity analysis List of Figures 2.1 Opinions as to whether intellectual property is well protected, 40 selected economies 2.2 Hotelling model: competition along a line 46 2.3 Porter’s ‘diamond of advantage’ 50 2.4 Dot density map of Vietnam – all 12 industries 66 2.5 Dot density map of Vietnam – automobiles 67 2.6 Dot density map of Vietnam – cement 68 2.7 Dot density map of Vietnam – electronics 69 2.8 Dot density map of Vietnam – garments 70 2.9 Dot density map of Vietnam – motorcycles 71 2.10 Dot density map of Vietnam – paper 72 2.11 Dot density map of Vietnam – rice 73 2.12 Dot density map of Vietnam – seafood 74 2.13 Dot density map of Vietnam – software 75 2.14 Dot density map of Vietnam – steel 76 2.15 Dot density map of Vietnam – sugar 77 2.16 Dot density map of Vietnam – textiles 78 2.17 Vietnam northern region commune-shading map – garments 79 2.18 Vietnam northern region commune-shading map – paper 80 2.19 Vietnam northern region commune-shading map – seafood 81 2.20 Vietnam northern region commune-shading map – steel 82 2.21 Vietnam northern region commune-shading map – textiles 83 2.22 Vietnam southern region commune-shading map – garments 84 2.23 Vietnam southern region commune-shading map – seafood 85 2.24 Vietnam southern region commune-shading map – steel 86 2.25 Vietnam southern region commune-shading map – textiles 87 2.26 Seafood clusters in the Mekong Delta 88 2.27 Hourly labour costs, selected developing countries 100 2.28 Vietnam provincial codes 106 3.1 Hierarchical structure of regional competitive power 114 in China 3.2 Local production system of bicycle enterprises in 152 Wangqingtuo Town, Tianjin City 3.3 Tianjin annual bicycle production as a percentage of that 158 of all China 3.4 Competitive advantage of enterprise clusters 159 4.1 Industrial cluster formed by an anchor firm 171 4.2 Value chain from design planning to marketing 173 4.3 Efficiency in production only 173 ix
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