Download ndustrial location 1

3.1
Where were manufacturing industries in Hong
Kong mainly located in the past? Where are they
now?
A What is manufacturing? What is industry?
1
Complete Table 1 to show the four sectors of industry.
Table 1
Sector of industry
Primary industry
Descriptions
Uses materials found in nature.
Example
Farming, fishing,
mining,
lumbering, etc.
Secondary industry
Industries that make things from
Manufacturing,
____raw materials______ or
construction, etc.
semi-finished products into ____more
valuable______ products by processes
such as assembling, fabricating, etc.
Tertiary industry
Industries that provide services to
Administration,
other industries and to people
retailing,
transport, other
commercial
activities, etc.
Quaternary industry
Industries that are concentrated with
Research,
_____information_____, its
software
application, ___manipulation___ and
development,
transmission.
media, etc.
1
B
What is a manufacturing system?
2
Complete the flow chart below to show the manufacturing system of a printing factory.
Inputs
Physical inputs
1
2
Manufacturing
processes
Cultural inputs
___Raw materials_____
such as paper, printing
ink, etc.
____Land_____
Such as paper
cutting, printing,
packaging, etc.
1
___Labour_____
4 ____Market____
2
____Capital____
5
3
___Transport___
6 Government policies
Power supply
Outputs
Cash
Market
3
___Useful___ outputs
_____Waste_____
Such as books, printed
matter, etc.
Such as waste paper,
waste, etc.
How can we classify manufacturing industries into different types? Complete Table 2 to show
the classification of manufacturing industries.
Table 2
Criteria
By ___weight___
Type
•
Heavy and bulky raw materials are used
•
Heavy products are produced
•
Light raw materials are used
•
Light products are produced
Labour-intensive
•
Much labour is used in production
Capital-intensive
•
Much capital is used in production
•
Little investment and labour are put into
Heavy
and amount of
raw materials and
products
By inputs of
Characteristics
Light
____capital____
and labour
By level of
___technology__
Low-technology
R&D
and research and
•
Traditional ways of production are used
development
•
Much investment and labour are put into
(R&D)
High-technology
R&D
•
Examples
Iron and steel,
shipbuilding, etc.
Textiles, electronics,
etc.
Garment,
watch-making, etc.
Petrochemical,
car-manufacturing,
etc.
Matches, traditional
handicraft, etc.
Genetic engineering,
computer and chips,
etc.
Advanced technology is used
2
C
What were the changes of manufacturing industries in Hong Kong
from the 1950s to the 1970s in terms of location and types?
4
Figure 1 shows the different stages of industrial development in Hong Kong.
Figure 1 Distribution of manufacturing industries during different industrial
development stages in Hong Kong
a
Listen to the recording provided in the IT resources website.
b
Refer to Figure 1 and the information given in the recording, complete the descriptions of
each stage of industrial development in Hong Kong.
Before 1949
•
Location: on the ____northern____ part of Hong Kong Island near
Victoria Harbour
•
Types of industries: related to ____port____ activities such as
shipbuilding and repairing and some light industries such as food
processing and furniture
•
Importance to Hong Kong’s economy: _______not significant_______
3
In the 1950s
•
Location: extended along the two sides of Victoria Harbour
•
Types of industries: _____textile and other light industries such as
plastics, wigs and food processing______________________________
•
Importance to Hong Kong’s economy: textile industry was a major
source of income and employed the greatest number of workers
1960s to 1970s
•
Location: along the two sides of Victoria Harbour, from Kwun Tong to
Tsuen Wan in Kowloon and from Chai Wan to Sai Wan on Hong Kong
Island
•
Types of industries: manufacturing became more diversified but textile
was still the most important
•
Importance to Hong Kong’s economy: manufacturing became the largest
employer and contributed most to the economy______________________
c
What were the location factors favourable to the development of manufacturing in
Hong Kong in the 1950s and between the 1960s and 1970s? Tick () the
appropriate answers.
In the 1950s
 Free port policy
 Rich natural resources

 Capital and
technology available
Large piece of flat
land
 Politically stable
 Sufficient and cheap
skilled-labour supply
 Good port facilities
1960s–1970s
 Free port policy

Large local market
 Good legal system
 Good transport
infrastructure

Low tax rates and no
exchange controls
 Good technical
backup services and
support industries
 Good
telecommunication
and postal facilities
 Abundant supply of
high quality
professionals
4
D
What have been the changes in the number of manufacturing firms,
workers and share of GDP by manufacturing industry sector since
the 1980s?
5
Figure 2 shows the number of manufacturing firms in Hong Kong from 1960 to 2008. Figure 3
shows the share of total working population by manufacturing workers from 1961 to 2008.
Figure 4 shows the share of GDP by manufacturing industry sector from 1961 to 2007.
Figure 2 Number of manufacturing firms in
Hong Kong from 1960 to 2008
Figure 3
Percentage share of total working
population by manufacturing workers from 1961
to 2008
Figure 4
Share of GDP by manufacturing industry
sector from 1961 to 2007
Source of figures 2 to 4: Census and Statistics
Department
5
a
Refer to Figures 2 to 4, briefly describe the changes of the manufacturing industry since
the 1980s in the following aspects:
i
Number of manufacturing firms
The number of manufacturing firms continued to ( increase / decrease ) in the 1980s,
but it _____dropped_____ greatly since 1990.
ii
Share of total working population by manufacturing workers
•
The number of manufacturing workers shared about __42__% of the total
working population in 1980 and the manufacturing industry has reached its
peak at that time.
•
Since then, its share has _____dropped_____ greatly and only shares about
___5___ % of the total working population in 2008.
iii
Share of GDP by manufacturing industry sector
The share of GDP by manufacturing industry sector has ____dropped____
drastically since 1980 and it only accounted for about ___2.5___ % share in 2007.
b
What can you notice about the importance of the manufacturing industry sector in Hong
Kong since 1980?
Its importance is declining.
E
6
How has the location of manufacturing industries in Hong Kong
changed since the 1980s? What manufacturing activities have been
relocated?
Besides importance, the location of manufacturing industries has also changed since the
1980s.
a
Where did most of the Hong Kong manufacturing firms relocate their factories?
They relocated their factories to the southern parts of China, especially to the Zhujiang
Delta Region.
b
Figure 5 (p. 7) shows the major manufacturing centres that developed in the area you
mentioned in Question a. Name these centres.
6
A Shenzhen
B Zhongshan
C Foshan
D Guangzhou
E Dongguan
F Huizhou
Figure 5
7
Figure 6 shows the choice of location for different manufacturing activities. Refer to Figure 6
and fill in Table 3 to show the type of manufacturing activities that most firms prefer to locate
in Hong Kong and Guangdong respectively.
Table 3
Manufacturing activities that
most firms prefer to locate in
Hong Kong
•
regional headquarters
•
sales and marketing
•
research and development
•
IT management
Manufacturing activities that
most firms prefer to locate in
Guangdong
Source: Made in PRD Study (2007), Federation of Hong Kong Industries
Figure 6
activities
Choice of location for different manufacturing
•
production
•
logistics
7
F
What are the reasons for moving production operations to the
Zhujiang Delta Region?
8
Complete Table 4 to shows the factors causing the relocation of production operations.
Table 4
_____Push_____ factors of Hong Kong
_____Pull_____ factors of the
Zhujiang Delta Region
Labour
•
Most of the manufacturing industries are
•
____Low____ labour costs in the
____labour___-intensive, the
Region greatly reduces the production
____high_____ labour costs in Hong
costs of labour-intensive industry. This
Kong raises production costs and lowers
helps increase the ____profit____ of
revenue of the firm.
the firm.
A Land price
•
___High___ land price  ___High___
•
Land
production costs
•
•
Government policies
Reduces ) production costs
B
•
___Low___ land price  ( Raises /
Land availability
( Plenty / Shortage ) of flat land forces
•
( Extensive /
Limited ) flat land with
firms to carry out production operations
basic facilities and ___infrastructure__
in ____flatted____ factories.
such as electricity, water supply, etc.
This ( hinders / favours ) expansion and
attract industrialists to set up factories
( raises / lowers ) production efficiency.
here.
( Strict / Loose ) environmental
•
Costs to comply with environmental
protection laws increases production
protection laws only accounts for a
costs and lowers profit.
____small____ proportion of the
production costs.
•
Local governments offer
____favourable terms_______ to
foreign investors, such as tax
concession. This helps ( increase /
reduce ) production costs.
8
Proximity to Hong Kong
•
It is easy for industrialists to monitor
the production operations because
factories are ( near to / far from )
Hong Kong.
-----
•
Firms can make use of the advanced
and efficient ____transport____
facilities in Hong Kong to export their
products and import raw materials.
G
9
What are the reasons for keeping company headquarters in Hong
Kong?
Which of the following are location advantages for setting up headquarters in Hong Kong?
Tick () the correct answers.
Monitor operations
Develop long-term
business strategies
Exchange information,
negotiation and bargaining
Functions
Headquarters
Location advantages in Hong Kong
 Politically stable and secure
 Support services available
 Cheap land rent
 Well-established legal system
 Efficient transport network
 Supply of high-quality professionals
 Efficient telecommunication facilities

Strict environmental regulations
9
3.2
Where should manufacturing activities be
located?
A How does a manufacturing firm make location decisions?
1
Below shows a simple formula on how a firm make a profit.
Profit = Revenue – Production costs
a
What is the most important aim of a firm?
To make a profit.
b
Refer to the formula. How can a firm earn more profit?
A firm can earn more profit either by ( raising / lowering ) revenue or ( raising / lowering )
production costs.
c
If you want to set up a firm, which place will you choose from below? Why?
Location A
Land rent: $100,000 per month
Labour costs: $450,000 per month
I will choose Location ( A / B ) because
Location B
Land rent: $62, 000 per month
Labour costs: $200,000 per month
land rent and labour costs are lower. This
helps cut production costs and maximize profits.
B What are single-plant firms and multi-plant firms?
2
Figures 1a and b show the operation of two manufacturing firms.
Figure 1a
Operation of Firm A
10
Figure 1b
a
Operation of Firm B
Refer to the operation of Firm A.
i
Where do all the manufacturing activities take place?
They all take place in a plant/factory in a city of Country X.
ii
What do we call such mode of production?
Single-point production.
iii
Where are the markets? Are they local markets or overseas markets?
Cities of Country X. They are local markets.
b
Refer to the operation of Firm B.
i
Does Firm B have all the manufacturing activities located in one plant? How does it
operate?
No. Firm B has its manufacturing activities carried out in a number of plants.
ii
What can you notice about the location of the plants?
They are located in different countries.
iii
What do we call such mode of production?
Multi-point/Multinational production.
iv
Where are the markets of Firm B?
Global markets.
11
v
What is the advantage of such mode of production?
It enables the firm to take advantage of the benefits of different sites so as to
lower production costs and increase profits.
vi
Name ONE enterprise that has adopted the same production mode as Firm B.
Nike, IBM, Nokia, Sony, Toyota or any reasonable answers
3
What location factors matter?
Complete Table 1 to show the location factors of manufacturing industries.
Table 1
Site factors
They refer to the geographical characteristics of a site which have an effect on the
development of the industry.
•
Location factors of manufacturing industries
C
______Land attributes_______
•
_____Communication systems_____
Operation factors
These factors are related to a particular location in a region which makes it possible
for manufacturing activities to benefit from easy access to raw materials, power,
labour, markets, management and clients.
•
Access to _____raw materials_____
•
Access to ______labour________
•
Access to clients
•
Access to ______markets_______
•
Access to ____management_______
•
Access to power
Socio-economic factors
They refer to the socio-economic quality in a region or a country. It explains how the
business environment is formed.
•
_________Capital___________
•
____Technology and innovation____
•
_______Agglomeration_______
•
Government policies
12
Site factors
4
a
How land attributes affect the location of manufacturing industries? Complete Table 2 to
show how heavy and light industries require specific land attributes.
Table 2
Heavy industry
Light industry
Examples
Iron and steel industry,
car-manufacturing industry,
oil refining industry
Electronics industry, textile
and clothing industry
Land area
( Larger / Smaller )
( Larger / Smaller )
Land price
( Higher / Lower )
Can afford higher land price
Extensive flat land
Flat land but manufacturing
activities can be carried out in
flatted factories
( Important / Less important )
( Important / Less important )
Relief
Importance of land
attributes to the industry
b
Where do high-tech industry likely to be found? What are the specific site conditions
required by such industry?
It is likely to be found in suburban industrial parks. Site conditions include lower land
price, room for expansion, good basic facilities and amenities.
5
Below is a map showing three locations for industrial activities.
Figure 2
13
a
If you were a manufacturer and want to set up a factory in the area shown in Figure 2 on
p.13, which location, A, B or C will you choose? Why?
Location C. It is because location C has a better transport network. It can be accessed
by road, railway and sea. This enables efficient import of raw materials and export of
products. In addition, it helps lower transport cost.
b
Table 3 shows the infrastructure of telecommunications of locations A, B and C.
Table 3
Location A
Location B
Location C
Poor
Average
Excellent
Telephone lines
Average
Good
Many
Satellite services
Poor
Good
Excellent
Television services
Good
Good
Excellent
Access to the
Internet
If you were to locate the headquarters of your manufacturing firm, which location would
you choose? Why?
Location C. It is because it has efficient infrastructure of telecommunications. This
enables efficient information exchange with branch offices and production plants.
Operation factors
6
Refer to Figure 3 below.
Figure 3
a
Compare with the weight of raw material, does the product lose weight or gain weight
after manufacturing processes?
It loses weight after manufacturing processes.
14
b
Where will you locate the sugar mill, near the source of raw material or near the market?
Why?
I will locate the sugar mill near the source of raw material. This is because the raw
material/sugar cane is bulky and heavy. The transport cost of raw material is higher
than the product. To locate the sugar mill near the source of raw material helps save
transport cost and therefore increase profits.
c
What do we call the industries that need to be located near the source of raw materials?
Raw material-oriented industries.
d
Some food processing industries such as canned fruits manufacturing are also located
near the source of raw materials. Why?
They are located near the source of raw materials because fruits/the raw materials are
( perishable / non-perishable ). By locating the industries near the raw materials, it can
prevent loss.
7
Figure 4 shows the labour characteristics of places A and B.
Place A
Labour supply: Abundant
Labour costs: Low
Skill level of labour: Low
Place B
Labour supply: Abundant
Labour costs: High
Skill level of labour: High
Figure 4
a
Which location will the industry listed below choose to locate? Why?
i
Toy industry will choose to locate in Place ( A / B ) because
•
this industry demands a ( large / small ) amount of labour
•
the abundant supply and ( low / high ) labour costs in the place help cut
production costs
ii
b
High-tech industry will choose to locate in Place ( A / B ) because
•
this industry demands ( skilled / unskilled ) labour
•
the quality of labour is ( less / more ) important than labour costs
What do we call the industries that demand for a lot of workers?
15
Labour-intensive industries.
c
Besides the cost, quantity and quality of labour, the presence of unions and number of
strikes are also important considerations when locating an industry. Explain.
Strong labour unions and frequent strikes will ( enhance / delay ) production and
therefore result in ( lower / higher ) production costs.
8
Figure 5 shows the location factors of aluminium smelting. (Hints: Size of the circle indicates
the importance of the location factor.)
Figure 5
a
What is the most important location factor for aluminium smelting?
Power
b
Where will aluminium smelting likely to locate? Why?
Near sources of power. This can reduce transport costs and therefore lower production
costs.
c
What do we call the industries that need to be located near the place you mentioned in
Question b?
Power-oriented industries.
9
a
b
Match the following industries with their characteristics by putting the number of the
industries in the correct boxes.
i
Dairy products
iii
Bulky and heavy
ii
Glass manufacturing
i
Perishable
iii
Car-manufacturing
iv
Easy to be out-of-date
iv
Newspaper printing
ii
Fragile
Where do you think the above industries should be located?
16
They should be located near the market.
c
What do we call the industries that need to be located near the place you mentioned in
Question b?
Market-oriented industries.
10
What is the benefit of locating the headquarters of the manufacturing firm near its clients?
By locating the headquarters near its clients, the firm can
have face-to-face contact with its
suppliers and customers. The information collected can be provided to production plants for
improvement.
11
Why some firms place the access to a good management team the most important location
factor of all?
It is because a good management team is able to choose the ( low-cost / high-cost ) location
and formulates strategies to expand its market. This helps ( lower / raise) production costs,
promote growth and raises profits.
Socio-economic factors
12
a
Heavy industries normally require a large amount of capital to start. What are the TWO
types of capital involve?
Financial capital, i.e. money and fixed capital, i.e. plants and machineries.
b
What do we call this type of industries?
Capital-intensive industries.
c
There is another type of capital which high-tech manufacturing seeks? What is it?
Venture capital.
d
What are the characteristics of the type of capital you mentioned in Question c? Tick ()
the correct answers.
e

It is a kind of private equity.

Its investments are usually high risk.

It is used to finance new, growth
businesses.

It is provided by professionals and
outside investors.

Its investment offers low returns.

It is normally provided by banks.
Where do you think the type of capital you mentioned in Question c is readily available,
in large cities or small villages?
17
In large cities.
13
14
Which of the following government policies favour the development of industries? Tick ()
the correct answers.
 Tightens strict pollution controls

 Reduces land rent
 Provides tax cuts
 Provides loan with low interest rates
 Protect the patent of inventions
 Restricts industrial land use in some
areas

Improves infrastructure and facilities
Restricts the extraction of natural
resources
Technology has a great impact on the location of modern industries.
a
How do technological advancements make the role of the following location factors less
important?
i
Transport
With technological advancements, transport cost of bulky and heavy raw
materials and products can be lowered. Large cargo ships can be used to transport
bulky and heavy raw materials, such as coal or iron ore.
ii
Raw materials
With technological advancements, fewer raw materials are needed. Substitutes
can be used. The transport costs of moving the raw materials from source places
to industrial location can be lowered.
iii
Labour
With technological advancements, factories can adopt automation, such as using
robots and machines in the production processes. This reduces the demand for
labour.
iv
Power
With technological advancements, less coal is needed for generating power in the
production processes. The improvement in electricity transmission technologies,
such as electricity can be transmitted by cables over a long distance, has also
lowered the importance of power as a location factor.
b
Refer to Figure 6 which shows the distribution of high-tech industries in the UK.
18
Figure 6
i
What can you notice about the location of high-tech industries in the UK?
They are located near the universities.
ii
Why the high-tech industries have to locate near the place you mentioned in
Question bi?
•
High-tech industries are _______research and development________-intensive,
located near _____universities_____ can have a good access to technical
support of research and development.
•
They can also gain access to _____innovations_____ and new ideas.
•
In addition, university graduates provide abundant supply of ( skilled /
unskilled ) labour to the industries.
19
15
Figure 7 shows the changes in the number of industries in Place X in 2000 and 2009.
In 2000, there were only a few
industries set up in Place X.
In 2009, there are many
industries cluster in Place X.
Figure 7
a
What do we call the concentration of industries in a particular place?
Industrial cluster/Industrial agglomeration.
b
Why do industries cluster?
By clustering together, the industries can enjoy agglomeration economies_____________
which help _____cut____ costs and ____increase____ profits.
c
Which of the following are the benefits that agglomeration offers? Tick () the correct
answers.
 Share sources of innovation
 Share supporting services and facilities
 Share common markets
 Enjoy an already well-established linkages with local manufacturers
 Attract skilled labour

Lower transport costs

Lower production costs
 Enjoy an already well-developed infrastructure
20
D
Will manufacturing activities remain at the present location?
16
Figure 8 shows the location of two iron and steel plants, A and B, in 1970 and 2009.
1970
2009
Figure 8
a
i
Where did plants A and B locate in 1970?
They were located near coalfields.
ii
What were the location advantages for plants A and B being located near the place
you mentioned in Question ai?
A ( small / large ) amount of coal was needed in the production of iron and steel. As
coal is ____heavy_____ and _____bulky_____, iron and steel plants located near
the ____coalfields_____ can help save transport cost.
b
i
What do you notice about the location of plants A and B in 2009?
Plant ( A / B ) moved to the ( inland / coastal ) region while Plant ( A / B ) remained
in the same location.
ii
Based on the information given in Figure 8, what are the reasons for the relocation
of Plant B?
•
The ____coalfields_____ has diminished, the favourable location factor no
longer exists.
•
Coastal location favours ____imports____ of coal from overseas, this helps
save transport cost.
21
•
Technological advancements has ___reduced____ the importance of coal as
___power____ and _________raw materials_________ in iron and steel
production.
iii
Plant B has relocated, Plant A has chosen to remain in the existing location. What do
we call such phenomenon?
Industrial inertia.
iv
List FOUR reasons for causing the phenomenon you have mentioned in Question
biii.
•
manufacturer’s personal preferences
•
buildings and machines are difficult to move
•
relocation involves very high cost
•
skilled labour is available in the existing location
•
linkages with other business sectors have been set up in the existing location
•
agglomeration economies in the existing location
•
well-developed infrastructure in the existing location
•
local markets available in the existing location
(any 4 reasons)
22
3.3
How has the location of the iron and steel industry
in China changed over time?
A What are the factors affecting the location of the iron and steel
industry?
1
a
E
Government
Offering grants and ___subsidies___
•
O
•
S
•
E
•
E
•
Complete Figure 1 to show the factors affecting the location of an iron and steel plant.
O
•
Labour
(Skilled / Unskilled ) labour
Power
A ( large / small) amount
of _____coal_____
•
Land
A ( large / small) area of
flat land
Agglomeration
Benefit from
__agglomeration___
_____economies____
Technology
Automation and
( advanced / backward )
technology
•
Market
____Large cities and
industrial centres_________
An iron and steel plant
Communication systems
• By ____rail____ or by sea
•
Capital
A ( large / small) amount
E
Management
O
O
S
O
Raw materials
____Iron ore______ or scrap
iron and steel, ___coal____
and limestone
Figure 1
b
Which group do the above factors belong to? Site, socio-economic or operation? Mark
appropriate letters in the boxes above. ‘S’ for site factors; ‘E’ for socio-economic factors;
and ‘O’ for operation factors.
23
c
Figure 2 shows the raw materials required to produce pig iron.
1.2 tonnes of iron ore
0.5 tonnes of coke
Less than 0.2 tonnes
of limestone
An iron and steel plant
1 tonne of pig iorn
Note: Coke is the charcoal made from coal.
Pig iron is the molten iron produced from the smelting of iron ore with coke and limestone in a
furnace. It is an important material for making steel.
Figure 2
i
What are the characteristics of the raw materials?
Heavy and bulky.
ii
Does the product lose weight or gain weight after manufacturing processes?
The product loses weight after manufacturing processes.
iii
According to the characteristics you mentioned in Question bi and ii, what kind of
industry does the iron and steel industry belong to? Tick () the correct answers.
B
2
 Power-oriented industry
 Heavy industry
 Raw material-oriented industry

Light industry
How important is the iron and steel industry in China?
Complete Table 1 to show the importance of the iron and steel industry in China.
Table 1
Note: North America Free Trade Area includes Canada, USA and Mexico
Source: International Iron and Steel Institute
Figure 3 Share of world crude steel
Figure 4 Share of world crude steel
production by country/region in 2007
consumption by country/region in 2007
Status of China’s crude steel
China was the world’s ______top______ crude steel
production and consumption
producer and consumer.
in the world
24
Source: China Statistical Yearbooks
Figure 5 Crude steel production
in China, 1955–2007
Before the 1980s
Pattern of
crude steel
production
After the 1980s
The growth of the production of
The growth of the production of
crude steel was very ( slow / fast ).
crude steel was very ( slow / fast ).
The economy of China has been growing ( slowly / rapidly ) after the 1980s.
Reasons for
the changes
The demand for iron and steel has greatly ( increased / decreased ) as a lot of
iron and steel consumption industries such as construction, automobile,
shipbuilding industries, etc. have developed rapidly.
C
3
What is the spatial distribution of the iron and steel industry in
China?
Figure 6 shows major iron and steel centres in China in 2001. Label the FIVE major iron and
steel centres on Figure 6.
Source: 2006《中國產業發展報告》
Figure 6
Major iron and steel centres and some large iron and steel firms in China, 2001
25
D
4
How has the location of China’s iron and steel industry changed
over time?
Figures 7 and 8 show the location of major iron and steel works in China during the 1950s and
1970s.
Figure 7 Location of major iron and steel
works in China in the 1950s
a
Figure 8
Location of major iron and steel
works in China in the 1970s
Describe the distribution patterns of the iron and steel industry in China in the 1950s and
1970s.
In the 1950s:
Most of the iron and steel works were located in the north-eastern
part of China.
In the 1970s:
Many iron and steel works were found in inland locations, such as
Wuhan, Panzhihua and Baotou.
b
What can you notice about the changes in the distribution patterns of the iron and steel
industry in China between the 1950s and 1970s?
Between the 1950s and 1970s, there had been an ( inland / coastal ) shift of the iron and
steel industry.
c
Complete Table 2 (p. 27) to show the factors affecting the location of the iron and steel
industry in China between the early 1950s and late 1970s.
26
Table 2
Between the early 1950s and late 1970s: Inland shift of industries
•
________Government policies________ played a major role on the inland shift of the
iron and steel industry. According to several Five-year Plans, iron and steel works were
Economic reasons
Strategic reasons
established in the inland areas.
•
During wars, factories in the ( inland / coastal ) areas could be easily attacked by
enemies.
•
Adopted the policy of ‘_____moving industries into the inland_____________________’
to safeguard its industries.
Figure 9 Distribution of
coalfields, coal mines and iron
ore in China
•
Compare Figure 9 with Figures 7 and 8. What can you notice about the relationship
between the location of iron and steel works and the sources of raw material and power?
Iron and steel works were located near the sources of raw material and power._________
______________________________________________________________________
•
Explain why the iron and steel works have such location pattern.
It is because the raw materials and power resources are _____bulky_____ and
_____heavy______. Locate near the sources of raw material and power can help
( increase / reduce ) transport costs. In addition, transport of raw materials and power
resources to the coastal regions was difficult because transport links were ( well /
poorly ) developed.
27
•
Level of economic development and living standard of the people in the inland regions
Social reasons
was ( high / low ).
•
Moving factories to ( coastal / inland ) regions helped develop the economy and raise the
living standard of the people there.
•
This helped to achieve a more ____balanced____ economic development throughout the
whole country and relieve the problem of _____overpopulation______ in the coastal
regions.
6
Figure 10 shows the location of major iron and steel works in the early 2000s.
Figure 10
a
Location of major iron and steel works in China in the early 2000s
Compare the locations of major iron and steel works in the 1970s (Figure 8 on p. 26 ) and
the early 2000s (Figure 10). What can you notice about the changes in the distribution
patterns of the iron and steel industry in China during that period?
During that period, there had been a coastal shift of the iron and steel industry.
b
Complete Table 3 (p. 29) to show the reasons for the coastal shift of the iron and steel
industry from the 1980s to the early 2000s.
Table 3
28
Government policies
From the 1980s to the early 2000s (Economic reform period): Coastal shift of industries
Overseas investors were
Open policy
encouraged
encouraged to invest in the
____coastal___ regions
‘Having some
regions developed
first’
Industrial
development in the
___Coastal____ regions
___coastal__
have been chosen for this
regions
purpose
Technological advancements
•
New furnaces are able to use ____scrap iron and steel____________ to
produce new steel  ( Reduces / Increases) the demand for iron ore
Raw materials
•
Iron and steel works tend to locate near ____coastal_____ cities where
the supply of scrap iron and steel is ( insufficient / sufficient )
•
Transport
Use of bulk carriers and advancements in railway transport 
( increases / reduces ) carrying capacity  ( raises / lowers ) transport
costs of coal and iron ore
Due to technological advancements, iron and steel industry ( is not / is ) necessarily tied to the
Favourable location factors in coastal regions
sources of raw materials and power.
Well-developed
infrastructure
Coastal
regions
Well-developed
infrastructure
___Import___ of iron
easy
Good port
facilities
ore and coal
___Export___ of steel
products
Coastal regions
are locations of
Existence of
industrial
centres
Important industrial centres
Big cities
favours
Agglomeration
economies
•
Big ___markets____ for steel products
•
Abundant supply of ___skilled workers____
29
Extensive flat
land and
sufficient supply
of cooling water
•
If necessary, more flat land can be obtained through ___reclamation___
•
Coastal areas provide extensive ______flat land_______ for the iron and
steel industry and ______cooling water______
Problems of inland areas
Which of the following are problems of inland areas that hinder the development of the iron and
E
7
steel industry? Tick () the correct answers.
 Far away from major markets
 Poor quality of coal and iron ore


Low accessibility
Lack of capital
 Rugged relief
 Mild climate

 Backward technology
Lack of skilled labour
Why do some iron and steel plants remain in their original
locations?
Figure 11 shows the location of Angang (a major iron and steel maker in China) and the
distribution of major coal mines and iron ore in Liaoning.
Figure 11
a
What were the favourable location factors for Angang to be located in Liaoning?
Liaoning was rich in coal and iron ore. Being located near the sources of raw materials,
Angang can reduce transport costs.
30
b
After decades of development, iron and steel production in Liaoning has become less
economical because of nearly diminished coal mines and iron ore, outdated machinery
and overburdened transport. However, Angang continues to operate in its original
location.
i
What do we call such phenomenon?
Industrial inertia.
ii
Why does Angang remain in its original location?
•
Relocation involves ( high / low ) costs.
•
It is ( economical / uneconomical ) to shut down the plant as investment in the
plant and related infrastructure is ___huge___.
•
Closing down the plant would reduce jobs which would cause
_____unemployment______ and other social problems.
•
Closing down the plant would ( raise / lower ) tax revenue for the local
government.
•
Closing down the plant would adversely affect other industries, especially iron
and steel consuming industries_____________________________.
F
Will there be further changes in the location factors?
8
We understand that location factors in a certain area will change with time. This will affect the
choice of industrial location. Will location factors change in China in the twenty-first century?
a
Will government policy still an important location factor?
•
Government control on industrial polices and planning has been ( increased /
reduced ) in recent years. The influence of _______economic market_______ has
become more important.
•
Local governments have tried to attract iron and steel works to set up in their regions
by providing ______favourable policies_________ to iron and steel enterprises.
b
Will the location of local sources of raw materials and power an important factor?
•
Local iron ore is of a ____low____ grade.
•
China’s dependence on ____imported_____ iron ore and coal has increased rapidly.
31
c
How would the factor of transport affect the location of the iron and steel industry in the
coming years?
•
The development of the railway network is ( faster / slower ) than the development
of the iron and steel industry. The low railway capacity has delayed the deliver of
imported iron ore.
•
All the five major iron and steel centres are located ____north____ of the Chang
Jiang. The economic development south of the Chang Jiang is very ____fast____.
Transporting iron and steel products from the north to the south requires
____high____ transport costs.
d
Will the market of iron and steel products be in the East only?
When the economic development in the Central and West increases, demand for iron
and steel products will ( increase / decrease ).
e
Figure 12 shows the present and new location of production plants of Shougang. Why did
Shougang move to Caofeidian?
•
Burning coal in the production
of iron and steel releases
carbon dioxides, sulphur
dioxide, and nitrogen oxides.
These pollutants will intensify
_________greenhouse
effect_________, reduce
visibility and lead to
_____smog_____ and
_____acid rain_____.
•
Figure 12
The iron and steel industry is the most serious source of _____air____, water and
_____solid waste__________ pollution.
•
In order to reduce the pollution caused by the iron and steel industry, Shougang have
relocated in areas which are ( near to / further away from ) populous city.
32
3.4
What are the location factors of the IT industry?
A
What is the information technology (IT) industry? Where is the IT
industry in the USA?
1
Which of the following descriptions about the IT industry are correct? Tick () the correct
answers.
2

It is a kind of raw material-oriented industries.

It manufactures computers, related electronic products and communication equipment,
etc.

It develops computer software and various related services.

It is a type of high-tech industry.

It requires little investment.
Refer to Figure 1, briefly describe the distribution pattern of the IT industries in the USA.
Figure 1
Distribution of the IT industries and large cities in the USA
In the USA, the IT industries form ____clusters____ in a ( concentrated / dispersed )
pattern. They are located in the suburbs of ( small / large ) cities.
B
What are the characteristics of the IT industry?
33
3
Figure 2 shows the manufacturing system of the IT industry.
Inputs
Raw materials
Power supply
Manufacturing processes
such as design, research
and development,
manufacturing,
assembling and packaging
Outputs
such as
computers,
MP3, PDAs,
etc.
Skilled and
semi-skilled labour
Technology
Capital
Figure 2
Cash
____Global____
markets
The manufacturing system of the IT industry
a
Complete Figure 2.
b
Which TWO are the most important inputs to the IT industry?
Capital and technology.
c
Explain your answer in Question b.
The IT industry has to use the latest technologies to produce ( low-value / high-value )
products. To design a product, IT firms have to invest a large amount of capital on
___________research and development (R&D)____________. Therefore, the IT industry
depends heavily on the inputs of ____technology____ and ______capital______.
d
Which type of industry does the IT industry belong? Tick () the correct answers.
 Capital-intensive
 Research and development-intensive
 Technology-intensive
34
4
Figure 3 shows the product life-cycle model for IT products.
Figure 3
Describe the life-cycle of IT products.
The life-cycle of IT products is ( long / short ). It may take only a few years from the
development stage to the decline stage.
5
Figure 4 shows the distribution of the headquarters, regional headquarters and manufacturing
plants of a famous US IT firm.
Figure 4
35
a
i
Where did headquarters, regional headquarters and manufacturing plants of the IT
firm locate respectively?
•
Headquarters and regional headquarters: Mostly located in ( less / more )
developed countries.
•
ii
Manufacturing plants: Mostly located in ( less / more ) developed countries.
Which mode of production does the IT firm adopt?
Multinational and multi-point production.
b
The mode of production of the IT industry is closely related to its production
requirements at different stage. Complete Table 1 to show the production requirements at
different stage.
Table 1
Stage of
production
Production requirements
•
Stage 1:
Development
•
Stage 2:
Growth
Stage 3:
Maturity
Location of
production
The IT industry in development stage is ____research
In headquarters
and development_____________________-intensive.
located in
A ( small / large ) number of scientists and engineers to
high-wage, more
carry out research and development and ( unskilled /
developed
semi-skilled / skilled ) workers to produce the products. countries.
•
Efficient management and shared basic infrastructure
•
The IT industry in these stages is __labour__-intensive.
In manufacturing
•
Abundant ____cheap____ and ( skilled / semi-skilled )
plants located in
workers to carry out standardized production processes. low-wage, less
developed
Stage 4:
Decline
6
countries.
Complete Figure 5 (p. 37) to show the distribution pattern of the IT industry in the R&D stage
and standardized production stage and the benefits brought by such distribution pattern.
In the R&D stage
In the standardized production stage
36
Distribution
pattern
Concentration in _____clusters______
Enjoy _____agglomeration____
economies
•
Induces _____innovation_____
•
Facilitates exchange of __market__
and ___technical____ information
•
Benefits
brought by
cluster
pattern
•
•
_____infrastructure_____
•
Helps cut costs and increases
_____competitiveness_____
Provides technical, financial and
____networking____ services
•
Attracts ____labour____
Establishes ____business contacts
•
Enjoys ____low____ rents provided
___________
•
Shares basic social facilities and
by the local government
Creates a distinct ___innovative__
culture and business climate
•
Attracts further __agglomeration__
of IT firms
Figure 5
7
Explain why global markets are important to the IT industry.
The IT industry invests a ____large____ amount of capital on _____research_____ and
development to produce a product. The products are sold in global markets so as to bring ( less
/ more ) profit to cover the huge amounts of money spent on research and development.
8
Figure 6 (p. 38) shows an IT industrial landscape.
37
Figure 6
a
What do we call such industrial landscape?
Green field site.
b
Briefly describe the industrial landscape in the following aspects.
•
Buildings (types, height, density, etc):
Low, modern, dispersed office-plant-laboratory buildings.
•
Location characteristics:
-
Availability of _____venture_____ capital
-
Near major ______universities______ and research institutes
-
____Abundant____ supply of scientists and researchers
-
In the _____suburbs_____ of large cities
-
( Small / Large ) green areas
-
Nice living environment with ( serious / less serious ) pollution
38
9
Complete the chart below to summarize the characteristics of the IT industry.
Green field sites
Short product
life-cycle
Cluster pattern
Characteristics of the
IT industry
Research and
development-intensive
Global markets
Multinational and
multi-point production
C
What are the location factors affecting the location of the IT
industry?
10
Complete Table 2 to show the location factors of the IT industry at different stages.
Table 2
Location
factor
Development stage
Green field site in more developed
countries.
Maturity stage
Manufacturing area in less developed
countries.
39
Table 2 (continued)
Labour
Site
Good access to researchers, technicians
Abundant supply of cheap and
and scientists
semi-skilled labour
•
•
____Headquarters____, R&D and
pilot production activities are
_______less developed________
located in ___more developed_____
countries
•
countries
•
•
Production plants are located in
____Cheap____ land site in an
In the ___suburan areas/suburbs___
industrial cluster with good
of large cities with good amenities
infrastructure
Near __________universities or
research institutes____________
Access to high levels of technology
Technology
Ready to receive transferred technology
from high-technology regions
Availability of venture capital
Availability of capital in the form of
Capital
foreign direct investment (FDI)
Favourable government policies to
Favourable government policies to
provide ____financial____ support for
provide infrastructure and communal
Government R&D, maintain a favourable business
policy
climate and an __innovative__ culture
services
within the community
Market
D
11
Large global markets
Does the same group of factors that affect the location of the iron
and steel industry apply to the location of the IT industry in the
USA?
Complete Table 3 (p. 41) to show the difference of the iron and steel industry in China and the
IT industry in the USA.
40
Table 3
Iron and steel industry in China
Type of
industry
IT industry in the USA
•
____Heavy____ industry
•
_____High-tech_____ industry
•
_______Raw material______ and
•
____Research____ and
Characteristics
____power_____-oriented
____development___-intensive
Mode of
production
Mostly single-point production
Mostly multinational and multi-point
production
Industrial
landscape
Traditional industrial landscape/Brown
field site
Green field site
Local
Global
From the 1950s to 1970s: Inland shift
Development stage: R&D in local
industrial clusters
Government policies
•
Technology: ( high / low )
•
Labour: ( unskilled / skilled )
•
Availability of ____venture____
Market
capital
Important
location factors
•
Site: suburbs of ____large____
cities and near universities
1980s onwards: Coastal shift
Maturity stage: production overseas
Government policies and technology
•
Labour: abundant, ___cheap___
and ______semi-skilled_____
•
E
12
Site: ____cheap____ land site
What impact has globalization had on the location of the IT
industry?
In order to maximize profits, the IT industry adopted the following strategies:
I
Globalization in marketing
II
Globalization in production
III
Globalization in sourcing inputs
a
How does the IT industry carry out globalization in marketing? With reference to the
41
figures, describe each of the method.
I
Manufacture a product in
Production plant
of Firm A
the home country and sell it
Manufacture
Headquarters
of Firm A
II
Products
sold
overseas
Home country
Headquarters
of Firm A
Grant a license to foreign
Products sold in
foreign country
Grant a license
Manufacture
Production plant of
foreign producer
Headquarters
of Firm A
producer to manufacture the
product and sell it in the
Home country
III
in the foreign market/export.
foreign country/market.
Foreign country
Set up a production plant in
Products sold in
foreign country
Set up
foreign country as ‘foreign
direct investment’ and sell
Manufacture
Home country
products there.
Production plant of
Firm A
b
Foreign country
How does the IT industry carry out globalization in production? Which of the following
descriptions about global production strategy are correct? Tick () the correct answers.
 Headquarters is kept in home country.  Standardized production processes
are outsourced.
 R&D departments are moved to areas
with low level of technology.
c
 Production plants are moved to areas
with low production costs.
What are the advantages of having globalization in sourcing inputs?
If an IT firm have global sourcing inputs, the firm can obtain ____cheaper____ and
_____better_____ quality components elsewhere. This can help ____cut___ costs and
therefore ____increase____ profits.
42
3.5
What is the impact of changes in industrial
location and modes of production?
A What are the benefits of having manufacturing industries in an
area?
1
Figure 1 shows the benefits brought by industrial development to an area.
Figure 1
a
Refer to Figure 1, write down how industrial development brought benefits to an area in
paragraph form.
When new industries are set up, jobs are created and people’s income will increase.
With higher income, more money can be spent in local shops and services. The local
economy starts to grow and this increases tax revenue for the local government. The
local government then have more money to improve the infrastructure. This attracts
more people to come and more new industries to set up in the area.
b
What do we call the effect brought by industrial development in an area?
Multiplier effect.
B Why do industries move away from an area?
43
2
Figure 2 shows the changes in location factors of Place A.
In the 1950s
In the 2000s
 Low labour costs
 High labour costs
 Low taxes
 High taxes
Figure 2
a
A manufacturer has set up an electronics factory in Place A in the 1950s. What were the
favourable location factors for setting up the factory there?
The labour costs and taxes were low, therefore the production costs were greatly
reduced.
b
In the 2000s, the manufacturer has moved the factory away from Place A. Why?
The manufacturer has moved the factory away from Place A because the location factors
are no longer ( unfavourable / favourable ). ______Labour costs_______ and
_____taxes_____ were high which greatly _____increased_____ the production costs.
3
Figure 3 shows the locations of the headquarters and production plant of an IT firm in the
1970s and 2000s respectively.
In the 1970s: Poor telecommunication network
Headquarters
Production plant
Country A
In the 2000s: Well-developed telecommunication network
Satellite
Headquarters
Production plant
Note: Country A is a more
developed country and Country
B is a less developed country
Flow of information
Country A
Country B
Figure 3
a
Describe the locations of the headquarters and production plant of Firm A in the 1970s
and 2000s.
44
Headquarters and production plant were located in the same country
In the 1970s
/Country A.
Headquarters and production plants are located in different
In the 2000s
countries/Headquarters is located in Country A while production plant
is located in Country B.
b
Complete the flow chart below to show the reasons for the changes in the location of
production plant of Firm A.
____Advancements____ in telecommunication technologies
Flow of information between the headquarters and production plant in
different countries is ( efficient / inefficient ) and the cost of
communications is ___low___.
Production plant can be located away from headquarters to the less
developed country to tap the advantages of _____low wage_____ and
___rents___.
Appearance of new production mode:
_____Multi-point_____ production
45
4
Figure 4 shows a simplified manufacturing system of a semiconductor chips production plant.
Table 1 shows some information about Places A and B.
Semiconductor chips
Inputs
Outputs
Toxic materials such
as mercury
Figure 4
Table 1
Place A
Place B
Environmental awareness of
the people
High
Low
Pollution control
Strict
Less strict
a
If you were a manufacturer of semiconductor chips, where will you set up your
production plant in terms of economic consideration only?
Place B.
b
Explain your answer in a.
The production plant not only produces useful outputs, but also harmful outputs such as
toxic materials. These harmful outputs will pollute the surrounding environment.
People in Place A may protest against the set up of the plant as their environmental
awareness is high. In addition, the pollution control is strict and this increases
production costs. In contrast, it is easier to set up the plant in Place B as
environmental awareness of the people there is low and pollution control is less strict
which can lower production costs.
C What is the impact of industrial relocation and the appearance of
new modes of production?
5
Complete the flow chart on p. 47 to show how the relocation of industry affects the flow of
labour.
46
Relocation of industry
affects
______Job opportunities______ in both old and new industrial areas
Examples
The IT industry in the USA
The iron and steel industry in
China in the 1960s
 Production plants are
 Factory workers were

 Research and development
relocated to less developed_
centres are relocated to the
encouraged to move to the
countries so as to enjoy
____suburbs____ of large
____inland____ as the
___lower production costs__
cities  attracts scientists
central government has
_______ some managerial
and engineers to move from
relocated the iron and steel
personnel and __specialists_
____urban____ areas to
industry there.
in the USA are sent to less
____suburban____ areas
This creates an
developed countries

This creates an
 intra-urban flow of labour
 international flow of labour
 inter-region flow of labour
 international flow of labour
6

 inter-region flow of labour
 international flow of labour
This creates an
Figure 5 shows how the relocation of industries causes the decline of local economies.
Relocation
New investment
____shrinks____
Factories are forced to close
Job losses
___Less___ money to spend
in local shops and services
Failure in subsidiary
industry
____Decline____ in the quality of
infrastructure for the local community
and industrial development
People move
away
Local economy declines
___Less___ tax income
for local government
Figure 5
a
Complete Figure 5 on p. 47.
47
b
Briefly describe how the relocation of industries give rise to unemployment in China and
the USA.
Iron and steel works have to adopt new modes of production in order
to be competitive. This has forced many outdated iron and steel works
to close or merge into larger ones. Restructuring of the iron and steel
In China
works has caused many workers to lose their jobs.
As more and more IT firms relocate their production bases and
software services to the less developed regions, a large number of
IT-related jobs have moved overseas. Many unskilled and semi-skilled
In the USA
c
workers have become unemployed.
What adverse effects will unemployment cause?
Unemployment will cause social problems such as drug addiction, drunkenness and
family abuse.
7
What is the impact of the relocation of factories to the Zhujiang Delta Region on the economy
and employment structure of Hong Kong?

Economy
_________Scale of production_________ has enlarged as firms moved their factories to
the Region. While headquarters remain in Hong Kong, businesses between the Region
and Hong Kong ( decreased / increased ). This has lead to an ( decreasing / increasing )
demand for producer services such as finance, banking, logistics, etc. and this caused a
______restructuring_____ of our economy. The land in ________old industrial
areas_______ can be used for commercial, high-tech industries, etc. and this may lead to
further change of the economy.

Employment structure
As the demand for producer services increased, more and more people work in the
48
tertiary sector in Hong Kong.
8
What is the impact of relocation of computer manufacturing from more developed countries to
less developed countries have on the environment?
_________Toxic chemicals_________ such as mercury are used in computer manufacturing.
When these materials are not treated or disposed of properly, it may cause serious
_________water pollution________ and ________health hazards________. As more and
more IT firms set up computer manufacturing factories in ( more / less ) developed countries,
pollution will become more serious as environmental protection laws are ( strict / not strict )
there.
The life-cycle of IT products is ___short___, many IT products become outdated within a
few years and this generates a large amount of _____e-waste_____ every year. As most of the
e-waste is shipped to ( more / less ) developed countries for ____disassembly____ and
disposal, the ____improper____ dismantling methods has caused serious environmental
problems there.
9
Complete the flow chart below to summarize the impact of industrial relocation and the
appearance of new modes of production.
Flow of labour
Socio-economic impact

_____Intra-urban____,
inter-region and
Relocation of industries
and appearance of new
production modes
Environmental impact
_____international_____
flow of labour
Unemployment
Restructuring the economy
D What measures can be taken to ease problems caused by changing
industrial locations and modes of production?
49
10
a
What are the advantages of adopting the principle of eco-efficiency in production?
More goods and services can be created by using less materials and energy. This can
increase profits on one hand and reduce waste and pollution on the other hand.
b
Which of the following are measures of eco-efficiency in production? Tick () the
correct answers.
11
 Reduce material use
 Reduce energy use
 Recycle material
 Extend the life-cycle of the products
 Use non-renewable resources

Increase energy-efficiency of the products
 Make products more durable

Create more demand for products
Table 2 shows some suggested measures to ease problems caused by industrial relocation and
the changing modes of production in Hong Kong. Figure 6 shows the advantages and
disadvantages of these measures.
Table 2
Advantages
Disadvantages
Setting minimum wage
D
G, H
Improve social security system
F
B
Lower tax
E, I
A
Retraining programme for laid-off workers
C, J
B
A Reduce government revenue
B
F Provide a safety net for the
unemployed and the poor
Increase government expenses
G Factories may move out
C
Increase the
competitiveness of workers
H
Discourage new investment
I
D Protect worker’s income
E
Help to keep existing firm
J
Attract new investment
Reduce unemployment rate
Figure 6
a
What are the advantages and disadvantages of the measures shown in Table 2? Write
down the letters in the appropriate column.
b
Why is it not easy to build a sustainable economy?
50
It is because there are ______diversified______ interests among different social groups in
a community. _____Conflict_____ may arise as policies or programmes cannot satisfy all
social groups.
51