Patterns of Chinaʹs industrialization: Concentration, specialization, and clustering

This paper presents a few stylized facts on the patterns of Chinaʹs industrialization by computing a set of multi-dimensional measures on industrial concentration, regional specialization, and clustering based on census data at the firm level in 1995 and 2004. Our results show that Chinaʹs rapid industrialization is characterized by the following patterns: industries have become more spatially concentrated; regions have become increasingly specialized; and firms have become more interconnected, both within industries and within regions. In addition, the number of firms is growing faster in clustered areas than non-clustered ones. Together these patterns suggest that Chinaʹs industrialization process is largely cluster-based—a phenomenon in which a large number of highly interconnected firms are located within a well-defined geographic region.