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Wenzhou used to be one of the poorest regions in eastern China. With limited arable land, poorroad access to major cities, and little support from the upper level governments, this region seemed tolack all the conditions necessary for economic growth. However, over the past several decades Wenzhouhas developed the most dynamic private sector in China, and has accordingly achieved one of the fastestgrowth rates. In particular, the footwear industry in Wenzhou has grown from a negligible market share tothe largest in China. Here, we report a survey of 140 Wenzhou-based footwear enterprises of variousscales, and use this information to examine the driving forces behind the dramatic rural industrial growthseen in this region. Our results show that clustering deepens the division of labor in the productionprocess and makes it possible for small entrepreneurial firms to enter the industry by focusing on anarrowly defined stage of production. Therefore, Wenzhou represents an example of how clustering playsa significant role in helping fledgling rural industries overcome the growth constraints of capital andtechnology in the incipient stage of industrialization.

Keywords: cluster ; industrialization ; finance ; economic development ; nonfarmeconomy.

Subject(s): Community/Rural/Urban Development

Issue Date: 2007

Publication Type: Working or Discussion Paper

PURL Identifier:

Total Pages: 32

Series Statement: IFPRI Discussion Paper


Record appears in: CGIAR > International Food Policy Research Institute (IFPRI) > IFPRI Discussion Papers

Autor: Huang, Zuhui ; Zhang, Xiaobo ; Zhu, Yunwei



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