Social status

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Social Economy Development
Secondary industry in China
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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.
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Outline

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

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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/T4754-2002)
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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

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2. Development of the Secondary industry in China
2.1 Social economy
First stage
Second stage
Third stage

• Foreign economy

• Bureaucrat capitalism economy

• State-owned economy

• State-owned economy

Purchased

• Private owned economy (weak)

• Private owned economy

• Foreign economy

• Feudalism economy

• Individual economy

Confiscated

• Farmers and handicraftsman

• Individual economy

• Collective economy

• Collective economy

Outward-oriented economy with coexistence of
various economic composition Market economy
Internal-oriented public-owned economy Planed
economy
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2. Development of the Secondary industry in China
2.2 First stage national economic recovery
period

• Social economy collapsed and inflation was
  serious before the foundation .

What could be bought with 100 Yuan from 1937 to
1949 in Kuomintang area
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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.
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2. Development of the Secondary industry in China
2.3 Second stage Great leap forward, Economic
adjustment and Cultural revolution

• 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.

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2. Development of the Secondary industry in China
2.4 Third stage reform and opening

• In 1978, De Xiaoping visit Japan, China and Japan
  has established diplomatic relations from then on.

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2. Development of the Secondary industry in China
2.4 Third stage reform and opening
Secondary industry contributed about 59.28 of
national tax revenue in 2005.

• The total tax revenue from China's Secondary
  industry is the largest contributor of national
  tax revenues nowadays.

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2. Development of the Secondary industry in China
2.5 The level of industrialization industries
structure
Fig 1. GDP of Secondary industry increasing (100
million RMB Yuan)
Resource Statistic data from National Bureau of
Statistics of China
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2. Development of the Secondary industry in China
2.5 The level of industrialization industries
structure
Tab 1. Proportion in Chinas GDP
Primary Secondary Tertiary
1978 28.2 47.9 23.9
1990 27.1 41.3 31.5
2000 15.1 45.9 39.0
2005 12.2 47.7 40.1
2009 10.3 46.3 43.7
Resource Statistic data from National Bureau of
Statistics of China
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2. Development of the Secondary industry in China
2.5 The level of industrialization employment
structure
Fig 2. Amount of the employees working in
Secondary industry (Ten Thousand)
Resource Statistic data from National Bureau of
Statistics of China
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2. Development of the Secondary industry in China
2.5 The level of industrialization employment
structure
Tab 3. Employment structure of China
Primary Secondary Tertiary
1978 70.5 17.3 12.2
1990 60.1 21.4 18.5
2000 50.0 22.5 27.5
2009 38.1 27.8 34.1
Tab 4. Employment structure of developed
countries
Primary Secondary Tertiary
The U.S.(1969-1979) 50.0 29.0 21.0
Canada (1919-1923) 52.9 47.1 47.1
Britain (1951-1961) 34.4 30.0 35.6
Japan (1952-1953) 54.6 23.0 24.1
Resource Statistic data from National Bureau of
Statistics of China
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2. Development of the Secondary industry in China
2.5 The level of industrialization GDP per
capita
Fig 3. GDP per capita (RMB)
Resource Statistic data from National Bureau of
Statistics of China
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2. Development of the Secondary industry in China
2.5 The level of industrialization Life
expectancy
Tab 3. Life expectancy
1990 1990 2000 2000 2005 2005
Male Female Male Female Male Female
1990 66.84 70.47 69.63 73.33 70 74
Life expectancy of China is at the level of
Upper-middle developed countries.
Resource Statistic data from National Bureau of
Statistics of China World
Health Report 2006
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2. Development of the Secondary industry in China
2.5 The level of industrialization
technology of
Secondary industry

• In 2006, 66.4 factories own international or
  national advanced equipments.
• In 2006, 79.5 factories renovated their
  equipments.

• In 2006, only 57.0 factories had new products.
• In 2006, 50.9 factories had less then 50
  income came from self-owned brands. ,

Resource Statistic data from National Bureau of
Statistics of China
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3.Cases discussion
3.1 Township and village enterprise

• 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

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, farmers jobs, farmers income, tax,
urbanization
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3.Cases discussion
3.1 Township and village enterprise

• 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.

• In1990s, the development of township and village
  enterprises were slowed down. Why?

Government involvement, Scattered
distribution, Quality of employee, Pollution.
A village enterprise in Zhejing in 1980s
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3.Cases discussion
3.1 Township and village enterprise

• Present situation
• In 1990s township and village enterprise began to
  reform.
• Township and village enterprise contributed 28.1
  GDP in 2009.

A village enterprise in 2007
GDP structure contributed by township and village
enterprise in 2009
Date Resource Ministry of Agriculture of P.R.
China
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3.Cases discussion
3.2 Haier from Made in China to Made in word

• 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).

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3.Cases discussion
3.2 Haier from Made in China to Made in word

• 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

76 fridges were smashed by the CEO Zhang Ruimin.