THE 3RD CHINA - EMERGING INDUSTRIAL DISTRICTS IN RURAL CHINA

While the growth of postfordist industrial districts in certain locati ons in the developed world has been well documented, the impact of the shift toward flexible production in the so-called third world has rec eived less attention. This paper is an attempt to incorporate the dyna mic, networked, manufacturing family firms in parts of China into the flexible industrial district debate. We argue that dense networks of s mall firms emerging in rural China in many ways resemble the industria l districts of the 'Third Italy' and elsewhere: they are globally comp etitive in producing for fast-changing fashionable market niches, they contain networks of relatively autonomous small firms which are at le ast partially locally owned and managed and which often take part in h igh-value activities such as design and marketing. We suggest that the social embeddedness of investment and production linkages with ethnic Chinese firms in Hong Kong and Taiwan may be an effective substitute for the spatial concentration of suppliers, producers, designers, and final markets, which is recognized as an important source of innovatio n and flexibility in core industrial districts.