Geographical dynamics and industrial relocation: spatial strategies of apparel firms in Ningbo, China

Abstract

China’s emergence as a key exporter to the world has relied on low-wage and unskilled or semi-skilled labor and industrial clustering. The apparel industry exemplifies this export-oriented development model. Production and employment have become heavily concentrated in the coastal regions of east and southeast China. With growth in other sectors, prices, land costs, wages, and competitive pressures have all risen. This paper examines the diverse trajectories of firm relocation. As many studies on the driving mechanism of firm relocation have lagged or failed to disclose the full view, we develop a comprehensive tri-polar analytical framework that allows us to analyze the diversity of trajectories of firm relocation in the global, regional, and local context. The empirical analysis applies this framework to the apparel industry in the city of Ningbo, which is one of the biggest apparel clusters in China. Through an analysis of several case studies, we show the articulation of global, regional, and local factors that are co-shaping apparel firm relocation processes. We also show that the extent to which these factors affect a firm’s spatial strategies is highly dependent on the firm’s characteristics. Lastly, this paper examines the opportunities for local suppliers generated by firm relocation.

Keywords:

• firm relocation
• globalization/global
• regionalization/regional
• localization/local
• apparel industry

Acknowledgements

We thank Chen Guoqiang and Zhang Xiaofeng for their help in coordinating the fieldwork. We are indebted to the business people, scholars, government officials, and the industry association in Ningbo’s apparel industry who generously shared their time and stories. Special thanks also go to two anonymous reviewers for their constructive suggestions and comments. This work was supported in part by UNC-Chapel Hill Off-Campus Dissertation Research Fellowship, the AAG Dissertation Grants, the UNC-Chapel Hill CGI C.V. Starr Scholarship, and by the National Natural Science Foundation of China (No. 41271130, 41071075). All translations have been done by the authors. The authors are responsible for all errors and interpretations.