Changing pattern of industrial location Intra-urban migration

Dispersion to new industrial suburbs  What makes industries necessary to disperse to suburban location?  What types of industries are found in suburbs? Why?  What benefits are brought to suburbs?  Will new industrial suburbs create problems?  How to make it under control?

Industrial decentralization in Hong Kong  Late 70s – 80s from urban HK to new towns  New town development vs industrialization  90s from HK to South China

Efficient transport network / linkages with urban areas  Usually at junctions of highways / along railway lines / port locations  Tolo Harbour Highway  Tai Po Industrial Estate / Science Park / Fo Tan  Tuen Mun Highway  Industrial areas in Tuen Mun / Tsuen Wan  Tate’s Cairn Tunnel Highway  Shek Mun Industrial district

Part of new town development programme (institutional factors)  Tai Po / Yuen Long / Tseung Wan O Industrial Estates  Industrial land uses in Fanling / Sheung Shui (mainly for storage)  Tsuen Wan (Textile / bleaching / dyeing factories in 50s – 80s  Tuen Mun (Food processing / bus depot)

Environmental considerations  Noxious industries, e.g. oil depots / power plants / storage of dangerous goods  Recycling park / ecopark in Tuen Mun  Cement works / oil depots in Tsing Yi  Incinerators in Kwai Chung / Kennedy Town / Lai Chi Kok in 60s – 70s

Impact of out-of-town industrial development on land use pattern  More obvious functional segregation of land uses  Reduction of mixed land uses  Urban redevelopment

Conflicting interests of society  Environmentalists  Ecologists  Recreationists  Economists  Town people  Local people

CLP’s intention to construct a liquefied natural gas (LNG) terminal on the South Soko Island.

Regional dispersion of industries Agglomeration diseconomies

What are diseconomies?  Disadvantages of a firm’s operation because such concentration leads to an increasing cost of production

Industrial decentralization  What are the factors leading to industrial deglomeration?  Physical / economic / social / political  What are the risks of such relocation?  What can the industrialists do to minimize the risks?

Go West Policy  Refer to the PowerPoint

Is it true that industrial relocation doesn’t occur despite diseconomies of scale?  Yes / no?  Firms or particular groups of industries tend to remain in an existing location (non-optimal sites) after the original factors for their location have weakened or disappeared. The locations were more favourable in the past than they are now.  INDUSTRIAL INERTIA

Industrial inertia  What benefits can the industrialists enjoy at present locations?  What possible problems may the industrialists encounter in new locations?  What are the effects of inertia on firms which do not relocate?  How can these firms survive despite diseconomies of scale?

Benefits  Physical infrastructure, e.g. roads, water and electricity supplies, are present.  Ancillary services are available.  A pool of skilled labour is available.  The firms need to be near to existing market.  The firms need to maintain existing linkages with other firms (with long established business relations)

Problems  At the new sites, personal ties and linkages with the original industrial network may break down.  At the new locations, the cost and time of training new labour are needed.  There are risks and uncertainties in the new production environments. Knowledge about new regions is not so perfect.  There are diseconomies of disinvestment, e.g. high cost will be involved in moving bulky capital equipment.

How can these firms survive despite diseconomies of scale?  contraction of business  downsizing the workforce  closure of inefficient plants  restructuring by adaptation of existing industries in situ, introducing more efficient production methods  developing new industries/new products  movement towards specialization of products

Industrial cycle  Industrialization  de-industrialization (decline)  development of new industries  re-industrialization (industrial rejuvenation)