1. Key Issue 3 Where is Industry expanding
Chapter 11
Key Issue 3 Where is Industry expanding

2. Industrial Expansion Changing distribution within MDCs
Intraregional shifts in manufacturing
Interregional shifts in manufacturing
New industrial regions
Asia
Latin America
“Central” Europe

3. Changing Distribution Within MDCs
Various reasons for a shift of manufacturing plants
Intraregional shifts
Interregional shifts

4. Intraregional Shifts in Manufacturing
Factories used to locate inside cities
Situation
Proximity to market & convenience of shipping by rail
Site
Proximity to supply of labor and capital
Land became less available
Space for large machinery  suburban or rural areas
More space & highways for trucking (not rail)

5. Interregional Shifts in Manufacturing
United States: Shifts South and West
Northeast lost 1 million manufacturing jobs over last 3 decades (NY & PA)
Industrial growth in South stimulated economy
Lack of unions made South enticing for industries
Workers in south willing to work for lower wages
Gulf Coast: oil & natural gas
Los Angeles: harbor for shipping & low-pay workers from Mexico & Asia

6. Interregional Shifts in Manufacturing
Western Europe: shifts toward undeveloped areas
Diffused from industrial centers in NW Europe toward South & Eastern Europe
Government policies encourage relocation: incentives
Spain: has become 2nd largest motor vehicle industry in Europe

7. New Industrial Regions
China: new leading industrial center
Steel production: % in MDCs, now LDCs is 55%
ASIA
China: largest manufacturer or textiles, apparel, steel & household products
Largest supply of low cost labor & largest market for consumer products
1990s opened China to transnational corporations

8. New Industrial Regions
China: 3 main industrial areas along east coast
Only ¼ of China’s population
But, ½ of China’s wealth, ¾ of foreign investment, 5/6 of foreign trade

9. New Industrial Regions
Latin America
Mexico: Mexico City & Brazil: Sao Paulo
1960s, Latin American countries decreased imports of foreign goods through regulations
Foreign companies could only operate in Lat America if most parts/materials were domestic
1980s Lat Amer hit hard from oil shortages, inflation, etc

10. New Industrial Regions
Mexico: far north, not population center
Increase in manufacturing, large US market
Maquiladora plants established on border
Regulations decreased to open foreign trade, NAFTA
Mexican manufacturing wages not as low as China (400/month vs 100/month)
Maquiladora plants closing as plants move to China

11. “Central” Europe Fall of Communism, early 1990s
Poland, Czech Republic & Hungary
More industrial development
Abundant labor and market proximity
Less skilled, cheaper labor than W Europe