Changing industrial location─How and why does it change over space and time?

1. Changing industriallocation─How andwhy does it changeover space and time?

2. 3.1 Where were manufacturing industries in Hong Kong mainly located in the past? Where are they now?

4. Industry means activities thatproduce goods and services. What is industry? Can you identify the industries on the left? Try to drag the appropriate labels onto the photos. If the game cannot work properly, click here to download the latest Adobe Flash Player.

5. What is industry? Types of industry Primary industry Secondary industry Tertiary industry Quaternary industry Transport Research Mining Textile industry Use materials found in nature Process raw materials or semi-finished products into valuable products Provide services to other industriesand to people Concentrated with information, its application,manipulationand transmission Can you name three more examples for each type of industry?

6. What is manufacturing? In a narrow sense, industry is confined to those activities in which raw materials are fabricated, assembled or transformed into more valuable products. This process is called manufacturing. Which type of industry is manufacturing?

7. What is a manufacturing system? Inputs Processes Outputs Useful outputs Cash Waste Market

8. Before 1949: Along both sides of _______________ 1950s: Further expansion along Victoria Harbour 1960s and 1970s: Along both sides of Victoria Harbour, extending from ___________ to Tsuen Wan in Kowloon, from Chai Wan to Western District in Hong Kong Island Different stages of industrial development in Hong Kong Victoria Harbour Kwun Tong

9. What has happened to our manufacturing industry since the 1980s? What is the trend in the number of manufacturing workers since the 1980s? Throughout the 1960s and 1970s, the number of manufacturing workers grew continuously. Source: Census and Statistics Department

10. What has happened to our manufacturing industry since the 1980s? Let’s look at the trend in the share of GDP by manufacturing industry sector in Hong Kong. In conclusion, the importance of the manufacturing sector has been ( decreasing / increasing ) in Hong Kong. Source: Census and Statistics Department

11. What has happened to our manufacturing industry since the 1980s? Taking advantage of low production costs in China, many manufacturing firms in Hong Kong have relocated their factories to the southern parts of China, especially to the ________ _____________. Guangzhou Besides changing in importance, the location of manufacturing industries has also changed since the 1980s. Huizhou Foshan Dongguan Jiangmen Shenzhen Zhongshan Zhujiang Zhuhai Hong Kong Delta Region The major manufacturing centres in the Zhujiang Delta Region

12. What manufacturing activities have been relocated to the Zhujiang Delta Region? What activity do most firms prefer to locate in Guangdong rather than Hong Kong? Why do the firms move their production operations to the Zhujiang Delta Region? Source: Made in PRD Study (2007), Federation of Hong Kong Industries

13. What are the reasons for moving production operations to the Zhujiang Delta Region? • Push factors • Low wages • Low land rent • Extensive flat land • Less strict control on pollution The Zhujiang Delta Region possesses many pull factors attracting industrialists to relocate their factories there, while Hong Kong possesses many push factors, which do not favour production. • Push factors • ( Low / High ) wages • ( Low / High ) land rent • ( Extensive / Limited ) flat land • ( Less strict / Strict ) government controls on pollution • Favourable conditions are given to Hong Kong manufacturers • Near to Hong Kong • Industrialists know the place and have good connections

14. (Credit: Liang Wing Hang Yanchap) Central, Hong Kong What are the reasons for keeping company headquarters in Hong Kong? The basic functions of headquarters are to monitor operations and develop long-term business strategies. Why are there many companies keeping their headquarters in Hong Kong? These activities involve exchange of information, requiring easy and frequent communications with other organizations

15. What are the reasons for keeping company headquarters in Hong Kong? The advantages of keeping company headquarters in Hong Kong are Efficient support services and telecommunications facilities Efficient transport network Good supply of high quality managers, accountants, engineers and technicians Politically stable and secure, well-established legal system

16. Is industrial relocation happening in other industrial regions? location When the advantages in the ________ of a firm has ( increased / diminished ), or when there are changes in the importance of location factors, industrial relocation will take place. Purchase of materials As the business environment of the Zhujiang Delta Region improves further, most of the industrial activities will be relocated there someday. Production Logistics Financial management Headquarters Sales and marketing This is a logical response to the changing location factors over _______. Research and development IT management time

18. Land Raw Materials, e.g. hardwood Capital Transport Labour Power Market Government policies Inputs of a manufacturing system (Using a furniture factory as an example) Physical inputs Cultural inputs

19. Processes of a manufacturing system (Using a furniture factory as an example) Other processes include… Design Cutting leather Purchasing Cutting wood Marketing Making the structure Transport etc… Mounting

20. Outputs of a manufacturing system (Using a furniture factory as an example) Waste Useful products Such as … Such as … Wood debris Cloth debris Table Leather debris Chair Sofa

21. Different stages of industrial development in Hong Kong Stage 1: Before 1949

22. Different stages of industrial development in Hong Kong Stage 2: In the 1950s

23. Different stages of industrial development in Hong Kong Stage 3: Between the 1960s and the 1970s

24. What are the reasons for moving production operations to the Zhujiang Delta Region? 1 Labour costs Year Daily wages (HK$) 359 (2007) 65(1981) 98 184 280 2 4 8 22 54 Daily wages of factory workers in Hong Kong and Guangdong between 1980 and 2006 Supply of cheap labour is abundant in the Zhujiang Delta Region. The firms can raise their profit margins to move their production operations there.

25. Flat land is limited and expensive in Hong Kong. This increases the cost of production. Due to the shortage of flat land, small firms are forced to carry out their production operation in flatted factories. It hinders expansion and reduces production efficiency. What are the reasons for moving production operations to the Zhujiang Delta Region? 2 Land A factory building in Kwai Chung (Credit: Lee W. F.)

26. The Zhujiang Delta Region has extensive flat land for industrial development. A lot of farmland is converted into industrial land use. The cost of obtaining land is ( low / high ). What are the reasons for moving production operations to the Zhujiang Delta Region? 2 Land A factory in Dongguan (Credit: Lam Siu Ching)

27. What are the reasons for moving production operations to the Zhujiang Delta Region? 3 Government policies Although the new environmental protection laws in the Zhujiang Delta Region ( decreases / increases ) the cost of production, it is still lower than Hong Kong The local governments in the Zhujiang Delta Region offer favourable terms to foreign investors A sewage treatment plant in Guangdong (Credit: China Features)

28. Since the major manufacturing centres of the Zhujiang Delta Region are located within one-day-travel distance, it is easier for industrialists to monitor the production operations. Being close to Hong Kong, industrialists can enjoy advanced and efficient local transport facilities and infrastructure. What are the reasons for moving production operations to the Zhujiang Delta Region? 4 Proximity to Hong Kong If I drive at 40 km/hr, how long does it take to reach Shenzhen and Dongguan from Central? 3 hours 5 minutes 54 minutes Central