Involves extracting and obtaining natural resources.
Examples: Farming, mining.
Secondary Industry
Involves turning raw materials into semi-finished or finished products.
Often refers to manufacturing industry.
Examples: Steel production, car manufacturing (garment, iron, steel, car).
Tertiary Industry
Provides services for customers or other industries.
Example: Banking.
Quaternary Industry
Focuses on Research and Development (R&D) and information services.
Examples: Software development, media, IT.
What is Manufacturing Industry?
Manufacturing System
Manufacturers invest in physical and human inputs (e.g., land and machinery).
Raw materials are transformed into finished products through a series of production processes (e.g., cutting, sewing).
Useful Outputs
Products go on the market, and the money earned is reinvested into the system.
Useless Outputs
Include fabric scraps and sewage.
Types of Manufacturing Industries
Weight of Raw Materials and Products
Light Industry
Example: Electronics industry.
Heavy Industry
Example: Iron and steel industry.
Input of Labor and Capital
Labor-Intensive Industry
Example: Garment industry.
Capital-Intensive Industry
Example: Shipbuilding.
Level of Technology
Low-Tech Industry
Example: Plastic industry.
High-Tech Industry
Example: IT industry.
Factors That Affect Industrial Locations
Locational factors include physical and human factors.
Physical Factors
1. Land
Important for heavy industries.
Many are located in coastal areas where cheap, extensive flat land is found.
Reclamation is used to expand the scale of production.
2. Energy
Power-Oriented Industries
Industries that consume large amounts of energy.
Example: Iron and steel industry, often located close to coal mines to reduce transport costs of energy resources.
With technological improvements, can be located at places with stable, cheap power supply.
3. Raw Materials
Raw Material-Oriented Industries
Industries that use bulky, heavy, or perishable raw materials.
Located near sources of raw materials to reduce transport costs.
Human Factors
1. Labor
Labor-Intensive Industries
Located in densely populated areas where cheap labor is abundant.
High-Tech Industries
Near universities where there are well-educated R&D professionals.
2. Transport
A good transport network is important for industries to transport raw materials and products efficiently.
3. Market
Market-Oriented Industries
Produce bulky, fragile, or perishable goods.
Have to be located near the market to reduce transport costs and product loss.
4. Government Policy
Governments provide manufacturers with incentives to boost industrial development.
Examples: Low-interest loans, favorable tax rates, good infrastructure.
Manufacturing Industry in Hong Kong
Light and labor-intensive industries grew rapidly and peaked in the 1970s.
Most were small in scale, with products mainly for export.
Distribution
1950s: Factories were found along both sides of Victoria Harbour.
Gradually expanded to urban fringes and new towns.
Concentrated along both sides of Victoria Harbour.
Expanded to urban fringe close to housing estates where labor supply was sufficient.
Further expanded to new towns with extensive cheap land.
High-tech industries developed in Pok Fu Lam and Sha Tin.
Stages of Development
1950s
Textile and plastic industries.
Chinese immigrants brought labor, capital, and technology to HK.
Located on both sides of Victoria Harbour.
1960s to Mid-1970s
Light industries (e.g., garment, toys).
Multi-story factory buildings were built on the urban fringe.
Mid-1970s to Mid-1990s
Industries that needed large spaces (e.g., food processing).
Located in industrial zones and estates in new towns.
Late 1990s to Present
High-tech industries.
Located close to universities; coastal areas provide a pleasant working environment.
Changes in Manufacturing Industry Since the 1980s
Industrial Relocation
Relocated factories to the Zhujiang Delta Region (ZDR), e.g., Shenzhen and Dongguan.
Later relocated to further cities in Guangdong, e.g., Foshan and Qingyuan.
Change in Production Mode
Single-Point Production Mode
HQ and factory located in the same place.
Multi-Point Production Mode
HQ in HK is responsible for management, product design, marketing, and logistics.
Factories are in ZDR.
"Front shop, back alley" production mode.
Decline in Importance
Industrial relocation made the industrial industry less important to Hong Kong's economy.
Push and Pull Factors That Caused Industrial Relocation
Push factors are unfavorable and motivate industries to leave an area.
Pull factors are favorable and encourage industries to move in.
1. Wage
Rising wages increased production costs of labor-intensive industries.
The large population of the ZDR provides an abundant supply of cheap labor, which reduces production costs.
2. Rent
Land supply in HK is limited, leading to strong competition and high rents.
Difficulty in expanding the scale of production in multi-story factory buildings.
Low-lying relief of ZDR provided extensive flat land at lower rents.
3. Government Support
HK government adopted a non-intervention policy in the 1980s and 90s; manufacturing industry lacked support and incentives.
The Chinese government set up Special Economic Zones in Shenzhen during economic reform in 1978, offering various incentives to attract HK manufacturers to invest in the ZDR.
Strict pollution control policies were set up in HK in the 1980s.
Factories were required to install sewage facilities, which increased production costs.
Pollution control was loose in the ZDR; sewage facilities and other environmental protection measures were not required, thus lowering production costs.
5. Geographic Location
ZDR is located in close proximity to HK.
Convenient for manufacturers to travel daily to ZDR to monitor production processes.
Shares similar languages and culture, which makes management easier.
Industrial Belt Locations Worldwide
Mainly found in mid-latitudes of the northern hemisphere.
Forms a discontinuous industrial belt spanning regions of Europe, East Asia, and North America.
Heavy industries are the major types of manufacturing activities.
Light industries are developed in some areas.
1. Europe
The UK is the birthplace of the Industrial Revolution.
Textile and iron and steel industries thrived.
Industrial activities spread to other parts of Europe (e.g., Ruhr Region in Germany).
In Eastern Europe, industrial activities clustered in St. Petersburg in Russia and spread to Moscow and Ukraine.
2. East Asia
Japan, Korea, and China are traditional industrial centers where heavy industries developed.
Cities along the eastern coast of the Kanto Plain in Japan.
Seoul and Busan in Korea.
Three Northwest Provinces and the Beijing-Tianjin Region in China.
3. North America
The Great Lakes Region is located at the border between Northeastern USA and Canada and is known for iron and steel and car-making industries.
Locational Factors That Favor the Formation of an Industrial Belt
1. Physical Factors
Large areas of cheap flat land.
Rich in natural resources, providing raw materials and energy resources, can save transport costs.
2. Human Factors
Big cities nearby provide markets, capital, and labor.
Good transport networks and facilities.
Local governments issue policies that support industrial development.
Agglomeration Economies
Similar or related types of industries cluster, they can enjoy benefits
Industries can share infrastructure (e.g., transport and power supply facilities).
Can save on production costs (e.g., car making and shipbuilding factories can buy steel in bulk at low costs from a steel plant nearby, which helps reduce transport costs of raw materials).
Supporting services are brought in (e.g., banking and insurance).
Workers with different skills are attracted to the area.
Industrial Inertia
Even if certain locational advantages disappear with time, some industries remain due to the availability of existing markets, facilities, and labor, which reduces the risk of industrial relocation.
Changes in Locations of Global Manufacturing Activities
New Industrial Regions
Many low-skilled production processes moved from More Developed Countries (MDCs) to Less Developed Countries (LDCs), which led to the emergence of new industrial regions.
Change in Manufacturing Output Value
Many LDCs have undergone rapid industrial development.
Their share in global manufacturing output value increased significantly, whereas MDCs declined; some MDCs even experienced industrial decline.
China is the fastest-growing nation among new industrial centers and overtook the USA, Japan, and Germany in the late 2000s to become the "World's factory".
Role of Transnational Corporations (TNCs) in the Global Shift of Manufacturing Activities
Production Mode
TNCs adopt a multi-point production mode by carrying out the division of labor in different countries.
HQs of TNCs are located in MDCs (home countries); regional offices and R&D centers are set up in other MDCs, responsible for decision-making, management, marketing, and product development.
Factories are bought or built in LDCs (host countries) through foreign direct investment (FDI), responsible for low-skilled production processes.
Allows TNCs to make good use of the locational advantages of different countries to reduce production costs and expand their markets.
Promotes global capital flow and technology transfer, which boosts industrial development of LDCs.