Reports
Discussion Papers
No.088 Domestic Market-based Industrial Cluster Development in Modern China
by DING Ke
February 2007
ABSTRACT
China’s huge domestic market is constantly expanding, and is low-end demand oriented and highly dispersed. The domestic market-based development of China’s industrial cluster, however, is not only a quantitative expansion, but has also been accompanied with remarkable qualitative upgrading. Specialized markets are a microcosm that clearly indicate this paradoxical phenomenon. By analyzing three typical cases of industrial clusters that have specialized markets, this paper will make the case that under modern China’s market conditions, the local public sector is the crucial driving force for upgrading industrial clusters, which organize complicated transactions, promote quality control, and stimulate the division of labor.
Keywords: industrial cluster, market condition, specialized market, local public sector
JEL classification: L1, L5, L6, O1
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