Social Economy Development Secondary industry in China

Three key industrial economic sectors Primary (raw materials) industry Secondary (goods production) industry Tertiary (service) industry Allan.G.B.Fisher. The Clash of Progress and Security ， London ： Macmillan ， 1935.

Outline 1. Introduction 1. Introduction 2. Development of the industry in China 2. Development of the Secondary industry in China 3.Cases discussion 3.Cases discussion

1. Introduction Industry involved with processing raw materials into end products. It includes* – Mining – Manufacturing – Electricity, gas and water supply industry – Construction * National Economic Industrial Classification （ GB/T ）

1. Introduction Heavy industries Petroleum refining, steel and iron manufacturing, motor vehicle, heavy machinery manufacture, power generation … Light industries Textile work and clothing manufacture, food processing, plastics manufacture, electronics and computer hardware manufacture, precision instrument manufacture, gemstone cutting, craft work…

Socialist transformation in 1958 State-owned economy Founded in 1949Reform and opening up in 1978 Collective economy Foreign economy Individual economy 2.1 Social economy Private owned economy (weak) Foreign economy Bureaucrat capitalism economy Farmers and handicraftsman Left State-owned economy Protected Private owned economy Protected Individual economy Collective economy Purchased State-owned economy Sino-foreign economy Private owned economy Purchased First stage Second stageThird stage Feudalism economy Confiscated 2. Development of the in China 2. Development of the Secondary industry in China Outward-oriented economy with coexistence of various economic composition Market economy Internal-oriented public-owned economy Planed economy

2. Development of the in China 2. Development of the Secondary industry in China Social economy collapsed and inflation was serious before the foundation. 2.2 First stage: national economic recovery period What could be bought with 100 Yuan from 1937 to 1949 in Kuomintang area / ‰

2. Development of the in China 2. Development of the Secondary industry in China Kumingtang officials: Although CCP has gotten 100 score in military affairs, they can get zero in economic affairs. Till the end of 1949, 2858 enterprises, which had 1390,000 employees, had been taken over by the new government from the bureaucrats. Learnt from Soviet Russia. 2.2 First stage: national economic recovery period The price became stable and the finance was improved.

2. Development of the Secondary industry in China After the Great leap forward, there was a five-year of Economic adjustment to make the Secondary industry and other economic sector recover. However the ten-years of Cultural Revolution broke out. During the ten-years of Cultural Revolution, factories often stopped work to take part in the revolution and the output of the Secondary industry decreased. 2.3 Second stage: Great leap forward, Economic adjustment and Cultural revolution

2. Development of the Secondary industry in China In 1978, De Xiaoping visit Japan, China and Japan has established diplomatic relations from then on. 2.4 Third stage: reform and opening

2. Development of the Secondary industry in China The total tax revenue from China's Secondary industry is the largest contributor of national tax revenues nowadays. Secondary industry contributed about 59.28% of national tax revenue in Third stage: reform and opening

2. Development of the Secondary industry in China 2.5 The level of industrialization: industries structure Resource: Statistic data from National Bureau of Statistics of China Fig 1. GDP of Secondary industry increasing (100 million RMB Yuan)

2. Development of the Secondary industry in China Primary Secondary Tertiary %47.9%23.9% %41.3%31.5% %45.9%39.0% %47.7%40.1% %46.3%43.7% 2.5 The level of industrialization: industries structure Resource: Statistic data from National Bureau of Statistics of China Tab 1. Proportion in China’s GDP

2. Development of the Secondary industry in China Resource: Statistic data from National Bureau of Statistics of China Fig 2. Amount of the employees working in Secondary industry (Ten Thousand) 2.5 The level of industrialization: employment structure

2. Development of the Secondary industry in China Primary Secondary Tertiary %17.3%12.2% %21.4%18.5% %22.5%27.5% %27.8%34.1% Primary Secondary Tertiary The U.S.( )50.0%29.0%21.0% Canada ( )52.9%47.1% Britain ( )34.4%30.0%35.6% Japan ( )54.6%23.0%24.1% Tab 3. Employment structure of China Resource: Statistic data from National Bureau of Statistics of China 2.5 The level of industrialization: employment structure Tab 4. Employment structure of developed countries

2. Development of the Secondary industry in China Resource: Statistic data from National Bureau of Statistics of China Fig 3. GDP per capita (RMB) 2.5 The level of industrialization: GDP per capita

2. Development of the Secondary industry in China * MaleFemaleMaleFemaleMaleFemale Resource: Statistic data from National Bureau of Statistics of China * World Health Report 2006 Life expectancy of China is at the level of Upper-middle developed countries. 2.5 The level of industrialization: Life expectancy Tab 3. Life expectancy

2. Development of the Secondary industry in China In 2006, 66.4% factories own international or national advanced equipments. In 2006, 79.5% factories renovated their equipments. Resource: Statistic data from National Bureau of Statistics of China 2.5 The level of industrialization: technology of Secondary industry In 2006, only 57.0% factories had new products. In 2006, 50.9% factories had less then 50% income came from self-owned brands. ，

3.Cases discussion Township and Village Enterprises are entrepreneurial communities based in townships and villages in rural areas of the People's Republic of China. They exist in small towns and in villages and involve people who previously were in farming 3.1 Township and village enterprise What advantages had the Township and Village Enterprises? Cheap land, cheap labor, help from local government. Would the Township and Village Enterprises benefit the economy and society? GDP increasing, farmer’s jobs, farmer’s income, tax, urbanization

3.Cases discussion Beginning in the 1980s and well into the 1990s, the main source of economic dynamism in reform-era China came from the development of township and village enterprises. In1990s, the development of township and village enterprises were slowed down. 3.1 Township and village enterprise A village enterprise in Zhejing in 1980s In1990s, the development of township and village enterprises were slowed down. Why? Government involvement, Scattered distribution, Quality of employee, Pollution.

3.Cases discussion Present situation: In 1990s township and village enterprise began to reform. Township and village enterprise contributed 28.1% GDP in Township and village enterprise A village enterprise in 2007GDP structure contributed by township and village enterprise in 2009 Date Resource: Ministry of Agriculture of P.R. China

3.Cases discussion Haier is the world's fourth largest white goods manufacturer. As of 2007, the Haier Group has established a total of 64 trading companies (19 located overseas), 29 manufacturing plants (24 overseas), 8 design centers (5 overseas) and 16 industrial parks (4 overseas). 3.2 Haier from Made in China to Made in word

3.Cases discussion In 1984 ， Haier was founded on a closing down factory, named Qindao fridge factory. From 1984 to 1991, Haier established the "Brand Building Strategy" and the "Zero Defect" quality standard. In 1985, the national famous event “ fridges smashing ” 3.2 Haier from Made in China to Made in word 76 fridges were smashed by the CEO Zhang Ruimin.