FROM THE WEB SITE OF THE FRENCH CENTER FOR RESEARCH ON CONTEMPORARY CHINA
The presentation focused on the development of small and medium sized enterprises in industrial clusters of Guangdong province, focusing on the Shuikou township where more than 20 interviews have been carried with enterprises and local authorities. Arvanitis focused on the development of the local faucet industry.
The industry has gone through three different phases of development. The first phase lasted from 1979 to 1986. Small companies were started with limited capital. During the second phase, 1985-1999, the industry followed a rapid development pattern, which Arvanitis calls a “mercantilist economy”. Former workers create a great number of enterprises and Shuikou becomes a strong industrial base. After 1999, a third phase has begun sharing, that is close to a “capitalist economy”. The author underlined the fact that the industrial base benefited from workers having strong previous competences, more than specific policies designed by local authorities. In fact, local government played a very minor role in the emergence of the industry.
Then the internal process of learning of companies was presented. The larger companies have followed a consistent pattern : strong linkages to clients but weak technical relations with providers and even with other enterprises. Even in such a small township, where most people know each other, the industrial linkages are very weak. The technical base is weak but is constantly upgraded mainly through contacts with foreign clients. In fact, most companies seem to look at foreign clients less in a need of a market but more in a drive for new models, new processes and improvements of their technical knowledge.
In the process of change of the economic base, the role of the local governments has been changing a lot. Initially local governments have been mainly driven by the need to collect taxes ; after the consolidation of the local economy, the government sees a need for more intervention in helping the promotion of local businesses. The government participates in setting up a local fair, helps companies in exporting, in getting in touch with foreign clients, provides them with support in order to get credits and tries to participate in many ways in their administrative life.
After looking at the case of Shuikou the author speculates on how much this situation is similar to other industrial cities in Guangdong province. A general pattern seems to emerge, where local entrepreneurs are becoming the main actors of social and economic life, where local governments participate as regulators rather than by direct economic involvement. In fact, industrial townships in Guangdong are becoming recognized institutional actors and an object for government policies. Recently, provincial authorities have created and extended a network of “innovation centres” which are middle-level technical institutes supporting the growth of small and medium sized enterprises. The centres appear to be the vectors of a new innovation policy, since innovation and low educational and research levels are still the main limits in the development of Guangdong province. It still remains to see if there is going to be a closer cooperation between the innovation centres and the firms, a necessary first step in setting-up a regional innovation system.
See also : A publicity of Shuikou